Is it time to sell?

There are many reasons why you might want to sell your business, including retirement, relocation, health issues and personal situations. However, the number one reason owners sell their business is “burn-out”. This includes many owners who have been very successful and have built a great business, but are now ready to sell and move on to a new challenge. Or it may just be time to cash in on hard work and take some time off. No matter your reason for selling a business, we can help you to effectively value, package, market, and ultimately sell your business.

Do you really want to sell this business?

If you’re really serious and have a solid reason (or reasons) why you want to sell, it will most likely happen. You can increase your chances of selling if you can answer yes to the second part of this question: “Do you have reasonable expectations?” A yes answer to these two questions means you are serious about selling. If money is the only reason you want to sell, then you may not be a motivated seller.

What is my business worth?

Before you ask that question, you have to be ready to sell for what the market is willing to pay. The common mistake Business owners make when they make a decision to sell is what they think their business is worth, or what you want for it. It also doesn’t make any difference what your accountant, banker, attorney, or best friend thinks your business is worth. Only the marketplace can decide what the value of your business is. To most, it is priceless it is their own sweat and blood cannot be quantified in a price. Valuation is a crucial step in the selling process. We will conduct a comprehensive analysis of your business and your financial statements. We use the Market Data Method to determine the best, most achievable sales price in the market based on an analysis of sales data from comparable companies. In the end, “The Market” will determine the value, but setting the right listing price will help you to effectively market and sell your business.

Why do I need a broker?

There are many reasons to use a business broker to sell your business. The most important reasons include:

  • Helps to get the right price and the right terms for your business.
  • Allows you to focus on running your business – making it even more attractive to potential buyers.
  • Assures confidentiality of business information.
  • You only deal with qualified business buyers who have a good understanding of your business.
  • Expert help with negotiations, contracts, financing alternatives, due diligence and the many items needed to get from an offer to sale of your business.

Is there a fee or other expense due before I decide to sell my business?

Normally we do not charge a sellers fee unless and until the sale is consummated. All sellers’ fees are usually paid at the closing table, deducted from the gross proceeds of the business sale. However, there are times the Sellers are required the pay for marketing costs based on the nature of business and cannot be sold easily.

How long does it take to sell a business?

The overall average from listing a business for sale to closing is about 6-8 months. Some businesses sell faster than others and some take much longer. Keep in mind that this time frame includes the total time from listing your business to closing, and includes marketing, finding and qualifying buyers, negotiating the contract, due diligence, financing, etc.

What if I have been taking cash out of the business?

It is often very difficult to prove to a buyer that you have income that is not documented in your company’s financial statements. And there’s an old expression – you can’t have your cake and eat it too! The bottom line is that bank financing is based on business tax returns. However, we can in many cases help you to get at least some of the added value that additional revenue would bring to your company. It may mean additional owner financing to get the higher value that reporting your total income would support. If you are considering a sale, stop taking cash and report all of your income. We’ll be happy to show you how much added value this can bring when you sell your business.

What records are needed to sell my business?

Conducting a thorough business valuation and preparing a comprehensive file to present your business to prospective buyers are key to the success of the sales process and the due diligence review. You should give us copies of your business tax returns and/or financial statements for the last three years and the current year, copies of important documents like leases and franchise agreements, a comprehensive list of all of your equipment, furniture and fixtures, an inventory report and other relevant documents important to understanding your business.

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