Business Sell

After investing countless hours and lots of money into growing your business, the last thing you want is to sell for anything less than what your business is worth. The truth of the matter is so many businesses end up being sold at a fraction of what they are worth. This is because the owners make somewhat simple mistakes such as rushing the sale or failing to enlist professional help. If you are getting ready to put your business on sale, you must learn how to sell it for maximum profit. With that in mind, the big question is this: how do I sell a business for maximum profit? Here are the key things you should do.

Get Expert Help

The mistake most business owners make is of believing they can handle the sale on their own. While in some cases this is possible, most business owners lack the expertise, time, and resources needed to handle the sale the right way. This is more so if you have never sold a business before. Moreover, selling a business is completely different from running a business. With that being said, enlisting the help of an experienced business broker is without a doubt one of the best things you can do to guarantee you sell for maximum profit.

The beauty of working with a business broker is that the broker has handled numerous business sales. It is their full-time job to sell businesses. Consequently, you can hire them in advisory capacities so that they teach you how to sale business or for them to take over the sale of your business. The broker will offer valuable input that not only helps you find the best buyer but also helps you sell fast, for the best terms and maximum profit. Keep in mind that a broker may already have a potential buyer in their contacts. This is because brokers maintain a database of investors who are looking for businesses to buy. The business broker is also more objective which means emotions will not cloud their judgment during negotiations. There is also the fact that a business broker is in a better position to manage confidentiality throughout the sale.

Manage Confidentiality

The sale of your business has to be kept confidential. This is why confidentiality management is very important. The more people learn about the sale, the higher the chances of loyal customers, employees, suppliers, lenders, and distributors leaving you. Needless to say, if these people leave, the value of your business will take a hit. Keep in mind that business buyers are more interested in businesses that can run smoothly with minimal involvement. If key employees leave, there will be a gap the new owner will have to fill. As a result, the buyer will require you to either stay on a little longer after the transfer of ownership or negotiate for a lower price.

The case is the same if suppliers, customers, distributors, or lenders leave. Keeping the sale confidential will further prevent predatory practices by competitors who might try to poach your best employees or clients.

Maintaining confidentiality is a lot of work. It requires using blind ads when putting up a listing of your business on sale, requiring prospective buyers to sign NDAs, pre-screening potential buyers, and so on. In most cases, a business broker will be in the best position to manage confidentiality. This is more so because the broker is not only a professional but also because he will not be directly associated with your business.

Sell for the Right Reasons

Selling for the wrong reasons can scare off buyers. As you answer the question of how do I sell a business, you must be honest with your reason for selling. There are so many reasons why business owners sell. The problem is not every reason will inspire confidence in potential buyers.

Here are some of the best reasons given on businesses 4 sales:

• Retirement

• Illness or death

• Partnership disputes

• Desire to pursue other things

There are many more reasons why you might want to sell. Run your reason by an experienced business broker. The broker will help you know if your reason inspires confidence or not.

Know What Drives Business Value

Many factors affect the value of a business. To learn about these factors, you have to perform a business valuation. A valuation will help understand the strengths and weaknesses of your business. It will also reveal what drives value for your business. You can then use this information to make your business more attractive to potential buyers.

Here are the main business value drivers:

• Growth potential

• Solid supplier and vendor relationships

• Stable customer growth from several sources

• A successful business model

• No history of legal disputes

• Perfectly documented systems and processes

Sell at the Right Time

As you research how do I sell a business, you will learn that timing is everything. The best time to sell a business for maximum profit is when it is doing very well. Investors are more willing to buy a business that is thriving. This is because such a business offers the best ROI.

Conclusion

There is a lot more that can be done to ensure you sell your business for maximum profit. The aforementioned points are meant to answer the question of how do I sell a business as well as help you get started on the right foot. Using any of the above points or combining several of them will guarantee that you sell your business for maximum profit.

You have spent a lot of money and effort growing your business. When the time comes to sell it, the last thing you want is to sell at a loss. The goal when selling a business is to get maximum value. However, achieving this goal is never easy. You will require a lot of preparation and also involve the right professionals. In this post, we will be learning about the key steps you need to take when selling your business.

Assemble the Right Team

As you may already know, selling a business involves a very demanding process. In addition to meeting with potential investors, negotiating with them, and doing everything in your power to make your business more attractive to prospects, you have to keep running your business optimally. Juggling all these can be overwhelming. That is why the best move forward is to bring together a qualified team to help you with a business sale.

There are many professionals you can bring on board. The key, however, is to make sure you only hire trusted advisors.

Your team must include the following professionals:

• A business broker

• Commercial real estate agent. This is important if you plan on selling the business

• together with the building or land it sits on.

• Mergers and Acquisition advisor

• Transaction attorney

Having these professionals on your team will guarantee that everything will run smoothly. If you don’t feel like you have the resources to hire all these professionals, hiring a business broker might be enough. Many business brokerage firms will have the other professionals you need in their employ.

Be Certain You are Ready to Sell

The worst mistake you can make is of changing your mind about selling your business right after your business has been listed and is getting traction on the local businesses for sale near my listing site. If you change your mind about selling, you will most likely lose the trust of not just potential buyers but also professional advisors. Keep in mind that a business broker is paid a success fee. This means they will not earn their commission until they close the sale. Consequently, if you pull out of the sale prematurely, brokers will be unwilling to work with you. One way of making sure you are ready to sell is being honest with your reason for selling. There are numerous reasons why business owners choose to sell their businesses.

When selling a business, most entrepreneurs do so for any of the following reasons:

• Partnership dispute
  
  
• Retirement
  
  
• Fatigue
  
  
• Ready for new challenges
  
  
• Cashing out
  
  
• Health problems
  
  
• Divorce
  
  
• Strong buyer interest
  
  
• Business is struggling
  
  

The above list of reasons why business owners consider a business sale is not complete. In most cases, a business broker will want to know why you are selling to determine whether you will go through with the sale or not. A business broker can also help you know if your reason for selling will instill confidence in potential buyers.

Determine the Worth of your Business

A business valuation is crucial when selling a business. It is what helps you learn about the strengths and weaknesses of your business. It also helps you know the real value of your business and the opportunities that are available to help you grow. A business broker can help with the valuation.
Businesses are mainly worth a multiple of their profit. Depending on the industry your business is in and its size, your business can be worth between 2 to 10 times its profit. Smaller businesses that are valued at less than $3 million generally average between 2 and 3 times profit. For a medium business that is worth between $3 and $20 million, the multiple can range from 3 to 5. Larger businesses are those valued at more than $20 million. These can have a multiple of 5 to 10 times their profit.

It is, however, good to note that determining the value of a business is not as straightforward. Many factors have to be considered. It is only by working with a qualified professional that you will be able to get an accurate valuation.

Put the Business on the Market

Now that you know how much your business is worth, you can set an asking price. The asking price should not only help you earn a profit but also help you attract more potential investors/buyers once you start selling a business.
Confidentiality has to be maintained in a business sale. The more people learn about the sale the more likely you will lose employees, suppliers, lenders, and customers who might be afraid of the uncertain future. The sale has to be kept a secret. That is why blind ads must be used. Potential buyers must also be prescreened to ensure they have the interest and financial means to buy your business. Buyers must also sign an NDA before any information about your business is shared with them.

Conclusion

While this guide looks simple, there is a lot that goes into the sale of a business. It is up to you to make sure you have the right team in your corner to guide you through the sale. A business broker is a professional you can never afford to do without when selling a business. Their input is simply invaluable.