Five things to consider when selling your business

The author is owner and MD of Rogerson Business Services

Selling a business has many moving parts and as a result is very complex.  

Here are five suggestions that may make the task easier.

1. Get a professional, third-party valuation

This may sound obvious, but naturally the seller wants as much money for the business as possible and the buyer wants to pay as little as possible.  

I would sooner pay too much for a good company than get a great deal on a company that won’t be around for much longer.

2. Hire a qualified professional that you trust

Selling a business is not always a quick and straightforward process.  Each business has its own unique characteristics and is part of the dynamic global, regional and local economy as well as a specific industry.  

Because of the complexities, ensure you have a qualified professional in the chosen field on your team, one that you trust and have complete confidence in. Apart from trust, other important components to look for include professional qualifications from the International Business Brokers Association (IBBA) such as those with a CBI (Certified Business Intermediary).

3. Make sure the business is sellable

So many owners plan on selling their business but as soon as it is on the market they stop doing the hard work that made the business what it is. It normally takes around six months to sell a business; if it can be sold.  

Make sure you continue advertising to your customer base, keep employees motivated, check your customers are happy, pay your bills on time and most importantly of all, continue to keep your landlord happy

The number one reason why a business won’t transfer from the seller to the buyer is that there is a dispute between the landlord and the seller and/or buyer.

Take your holidays before or after putting the business on the market.  Once it’s sold, then it’s time for that trip of a lifetime.

4. List the business for sale at or near the business valuation cost

If you’ve owned the business for many years or recently spent a lot of money fixing any problems, it’s not uncommon for sellers to want to ask for as high a price as possible, so they can earn back some of that money.  

Buyers have a large number of businesses to choose from.  Because most companies look similar, and because buyers are rarely emotionally attached to a particular business, buyers have little problem in walking away. A good business for sale is one that is fairly priced and which has good potential.  

Too many sellers want to be paid for potential, but that’s the reason why the buyer is buying the business and is only willing to pay a fair price. The buyer is the one that will do all of the work to take advantage of the potential, so they will not want to pay the seller for it.

5. Don’t forget the Golden Rule

The Golden Rule is: put yourself in the shoes of the other party. If you’re talking to your buyer, try to understand what’s important to them. If you are discussing your lease with your landlord, work out what’s important to them, and so on.  

Lenders, business brokers, franchisors (if applicable), lawyers, accountants and even family members have a role to play. Selling a business is not easy at the best of times.  

It’s even more difficult in a tough economy, if finances are tight or if key players have health issues.  There is value in hiring a professional you trust to help guide you and keep all the moving parts well-managed.

Sell your business on BusinessesForSale.com