Almost every business owner has considered selling their company at some point. Different motivations drive their actions. Someone starts a company to sell it for a fortune. Also, someone establishes a business with the intention of passing it on to their offspring, but ultimately must find a buyer for the company.
Statistics from the market for ready-made businesses reveal that for every 10–12 inquiries to purchase, just 2–3 buyers really materialize. Only around 15–20% of the items on display will sell at a price that roughly meets the owner’s expectations. Why? Because of insufficient efforts put in before the transaction. Therefore, you just need to learn tips for selling a business.
Selling motives
- No money. A shortage of operating cash for expansion is the primary motivation for selling a firm. As a result of reinvesting all earnings into the growth of the firm, the owners now have no funds available for further investments. Western businesses use bank loans, leases, initial public offerings, etc. As a consequence, many of our business owners, especially smaller ones, must find partners or sell.
- The desire to earn. It’s true that a firm may be sold for reasons other than financial distress. Assuming the sale of the firm yields a profit, you may “go to cash” and take some time off. You might also use your firm’s selling proceeds to start a more promising business. In reality, many sorts of enterprises are changing hands these days, and the main question isn’t whether the current owner would sell, but rather how much he can receive for his work.
Where to sell my company?
- Sites. There are many of places on the Internet where you may post an ad and your prices if you own a small company nowadays. Sending sales details to online marketplaces is one solid example of how to sell your business online. Placement is still less expensive than going via an investment firm to find a buyer.
- Corporations that invest. Their services aren’t cheap, but they’ll find a buyer, vet them, and finalize the sale for you. If you have businesses for sale, you can safely turn to Websiteclosers, and they will help you close it and sell it for maximum profit.
- Communities. The marketplace is another best way to sell your small business. As a member of a professional organization, you may present a deal to other members of the business community without spending time on phony suitors who aren’t serious about buying your company.
How to market a business for sale?
- Monitoring. You should first calculate how much money you’d make if you sold right now. Key considerations:
- the transaction is unrelated to industry decline;
- business specialization is in demand or predicted to grow;
- enterprise’s major business facilities’ favourable location.
If the company meets these conditions, it will sell faster. If you don’t have the time or skills to sell your company, hire pros who surely know what is the best way to sell a business.
2. The study of attraction. Buyers will evaluate your company’s market position, competition, and industry growth.
3. Examination of the lawfulness. Before selling, legal documents, leases, and contracts should be in order. Create a written “inventory” of your possessions as well. Capitalization may be increased by registering real estate, patents, and other property with the company.
The secret of successful negotiations
Make a pitch to potential buyers once the company is prepared for sale. Share critical company information:
- field of activity;
- reason for the sale;
- basic financial information: turnover, EBITDA, net profit;
- competitive advantages: location, clients, contracts, technologies;
- growth prospects.
Then and only then can you confidently meet a prospective purchaser.
1. Verifying the security of the asset.
However, the most exciting part of the process, due diligence, happens after the first conversations with the investor, and it becomes clear that he sees profit potential in your organization. The expert stresses the need of putting business procedures in order and making financial statements as transparent as possible since the buyer will examine all aspects of the firm, including the legal structure, business strategy, personnel, accounting, and taxes.
2. Take everything into account.
First, put yourself in the buyer’s shoes and examine his requirements and goals, as well as the factors that may influence his decision and the reasons he may use to negotiate a lower price.
There are several things to consider when selling a firm, including the obvious market and economic conditions, the situational considerations of key players (such as family situations), and the specifics of the business being sold.
A buyer will not be happy if you can’t keep track of the assets shown on your balance sheet in your head.
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