DOíS AND DONíTíS OF SELLING YOUR BUSINESS
- DO KEEP GOOD RECORDS and have them ready. If you don't have good books, the selling price can be significantly impacted. Good books increase the chances of a successful and profitable sale.
- DO ALLOW ADEQUATE TIME
to sell your business. Selling a business is a lot more complex than selling a house due to the confidentiality and packaging involved. If we already have a buyer in house that is just right for your business it can sell quickly, however it generally takes 6 to 8 months and sometimes over a year.
- DO OFFER TERMS. By accepting a reasonable down payment and offering terms on the balance you show that you have confidence in the future of the business and in the buyer's ability to manage it.
- DO CONSULT A KNOWLEDGEABLE BUSINESS INTERMEDIARY
about the timing, pricing, and terms of selling your business. Successful intermediaries are the only people who know what various businesses are actually selling for. Be careful of "magic" formulas or textbook approaches to valuing your business.
- DO USE A GOOD BUSINESS INTERMEDIARY TO SELL YOUR BUSINESS.
Just as you would hire an accountant and attorney to do your taxes and legal work, you should also hire an intermediary to sell your business. The reduction of stress and increased profit you realize from the sale should outweigh the cost of doing so.
- DONíT WAIT TOO LONG TO SELL.
The best time to sell is when your business is growing and showing a nice profit. If you wait until the business has become flat or started to decline, your selling price will be substantially lowered. Sell from strength!
- DONíT UNDERESTIMATE THE VALUE OF YOUR BUSINESS. Owners usually minimize profits to lower taxes, and the "bottom line" might not show the real value of your business.
- DONíT SELL TO THE WRONG BUYER.
Be as sure as you can that the potential buyer is capable of running your business. Your competitor, supplier or favorite employee is probably not the right buyer willing to pay market value for your business.
- DONíT OVERPRICE YOUR BUSINESS.
Donít make the mistake of overpricing your business with the "I can always come down in price" attitude. This sounds like a good idea, but in reality smart buyers know what a business should sell for and this often eliminates the best buyers. If your business stays on the market too long, you end up with less than you should have. Start at a reasonable level where the buyer can justify the selling price.
- DONíT PAY LARGE AMOUNTS OF MONEY FOR AN APPRAISAL
of your business. A good business intermediary will advise you about pricing your business, or charge a nominal cost if significant work is necessary. If you want a market evaluation report prior to selling the business, we can discuss these services with you.