SELLING DOs AND DON'Ts
If you're looking to sell a business, read our guide of key DOs and DON'Ts:
KEEP GOOD RECORDS
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.
UNDERESTIMATE THE VALUE OF YOUR BUSINESS
Owners often minimize profits to lower taxes, and the "bottom line" might not show the real value of your business.
ALLOW ADEQUATE TIME
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.
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.
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.
OVERPRICE YOUR BUSINESS
Don’t 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. Start at a reasonable level where the buyer can justify the selling price.
CONSULT A KNOWLEDGEABLE BUSINESS INTERMEDIARY
Consult an 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.
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!