by Max Stephen
http://www.business-trader.com.au
© 2007
There is no right or wrong time to sell a business
and there can be many different reasons like financial, lifestyle change, family
commitment, location etc. When a business onward has reached the decision that
it is time to sell their business, there are many steps that need to be taken,
carefully.
If you are thinking of selling your business,
here are some tips to get you started:
1. Give out the real
digits
It pays to keep your financial books organized and
updated.
Provide all financial information that a potential buyer needs to
know. They have the right to be given an accurate account of your profit and loss.
Your
financial statement should be complete. You should at least state 3 years of your
business’ income statements. It would also help to provide your tax returns
and lease statements. If you are under a loan, provide your current balance and
schedule of payments.
All the documents mentioned above
would be thoroughly inspected by your buyers. Be sure that you are ready to answer
all their questions about the financial status of your company. If you can provide
your buyer a concrete business and budget plan, so much the better. It would give
them the impression that you have an organized business to start with.
2.
Don’t overprice
After looking at all your financial
documents, you would have an idea on what’s your business is worth. It is
recommended that you hire a professional financial analyst to give you a fair
monetary value of your business.
You would not attract
any potential buyers with a high price.
The key in getting a quick sale is
to keep the price of your required down payment very affordable. Some business
owners are also willing to offer seller financing. This means that a seller provides
or facilitates a loan for a buyer in order to close the sale. The buyer would
then agree to pay an agreed amount over a specific period of time.
3.
Make your business attractive
Entice buyers to buy your
business by adding more value to your company. Make your package attractive as
you can but remember to offer a fair price.
More buyers
would be interested in your company if you make all your paperwork organized,
complete and impressive. It would be a good idea to reduce your cost by avoiding
purchasing equipments that are not really a necessity.
Build
a stronger customer base prior to selling your business.
You can do this by
offering promos, discounts and special deals for your customers. Providing a complete
documentation of your employers and suppliers is also a plus.
You
can easily sell a business by keeping your premises clean and attractive. If your
budget permits it, it would be a good idea to renovate your business area. If
not, cleaning and repainting would do.
4. Run your business
Even if you are selling your business, you should not stop
operation. Keep your business running. Your buyers would be totally turned off
if they would see even a slight hint of desperation in your part. That’s
why it is important to know the reason why you are selling off your business.
Keeping your company operational would give an impression that your business is
profitable and still in good shape.
5. Keep things confidential
If you are selling your business, don’t broadcast
it to the world. Customers may have an impression that your company might be encountering
serious problems, this would ultimately result to lower sales. Also keep your
employees in mind. They would probably look for another job even before you can
make the sale. Losing manpower can be a real hassle in your part.
6.
Know your buyers
Build a good rapport with all your potential
buyers. Be aware that there are a lot of scammers and timewasters out there. For
this reason, always screen each and every buyer that you encounter. Watch out
for your competitors who might play as a buyer in order to pry and gain confidential
information about your business. For your protection, have your lawyer draft a
confidentiality agreement between you and other interested parties.
In
summary, you can successfully sell your business for a good price if you keep
all your business and financial documents well accounted for. Next, keep your
bidding process organized and legitimate. You can also consider getting the help
of a business agent or broker to help you with selling your business, however
with the help of the internet many business owners are opting to sell privately.
Selling privately can save you thousands of dollars in
agent commissions and is quite simple to do. Not only are more business owners
selling privately, but more potential purchasers are choosing to buy privately.
A popular method is to advertise in local news paper classifieds,
along with advertising on business for sale websites will get you great results!
