How long is the legal process?
The time frame of the legal process can vary depending on the nature of the business and whether there are any legal complications. However, from the signing of the heads of agreement until completion you should usually leave at least six weeks.
Can you sell a business that is losing money/how to sell a failing business?
There are a lot of reasons why a buyer may be interested in a failing business and this might be a good route for a business owner who has seen a downturn in their enterprise.
A buyer might be looking for an investment that will have a lower valuation that they can buy, inject capital or energy into and turn around to start making a profit.
Make sure that you have considered all outstanding legal issues and trying to clear as many outstanding debts as possible. Focus on your assets and market these to buyers such as your customer base or your supplier relationships.
You will also need to be honest with potential buyers about your flaws. These will be revealed during due diligence and it is better to be upfront about these from the beginning.
Do I need a lawyer to sell my business?
Selling a business can be complicated, especially as most small business owners will only do it once or twice in their lives. It can, therefore, be a great asset to have a lawyer involved in at least some parts of the process. However, it is not a prerequisite.
For many business sellers, it is important to have a lawyer help with drawing up or looking over any contracts during the sale.
A lawyer will be able to help you get your contracts in order in preparation for the due diligence including those with customers, suppliers and employees. They will also be able to write up a Non-Disclosure Agreement for the potential buyer to sign before the due diligence process and negotiate and draft the sales agreement.
Do I pay tax if I sell my business?
If you sell your business, you might have to pay Capital Gains tax. This is true for any business asset that you sell. It is helpful to have the advice of an accountant on the tax that you will need to pay on the sale of your business.
Do you need a broker to sell a business?
Whether or not to use a broker will depend on your needs. While it is not completely necessary to use a broker in the sale of your business, you may want to use one to take some of the stress off of your shoulders.
If you are very involved in the day to day running of your business, you may want a broker to handle the sale. This will let you keep your focus on keeping your business running at full speed.
Using a broker will, however, require that you pay a commission of the sale to them. Most importantly, however, the exact broker you use can make a huge difference to the success of the relationship.
Read more in depth on the question here.
How can I sell my small business fast?
There are a few considerations that you can make if you want to sell your business as speedily as possible.
Make sure that you have priced your business correctly. If your business is overpriced, you will struggle to find a buyer. Make sure that you are prepared for the due diligence process. Have all your documents and financials in order and ready when requested.
Make your business listing as attractive as possible. Get some really good, high quality images of your business to go with the listing and give as much information as possible to any potential buyer.
You could also find a similar business to yours that might want to expand their customer base or offerings through purchasing your business. Usually, they will not want to buy the premises or the fittings or the equipment. They will, however, be looking for your contracts with suppliers and your intellectual property.
How do I market my business for sale?
In order to market your business, you should take advantage of the reach that putting online will have. You can also use a broker to help with this process and they should be able to take this action for you or assist you. They will also be able to advertise your business through their established networks.
No matter whether you advertise online or offline, you will need to get high resolution images that give a clear idea to the buyer of what your business looks like. You will also need to include as much information as possible in the advert. The more information you can include without giving away sensitive information, the better.
Luckily, BusinessesForSale.com can help you with this! Get hold of us if you want us to write your listing for you to make sure that it is written for SEO and to ensure you get noticed by buyers.
How do I sell my business privately?
If you want to sell your business privately, you can reach out to customers and people in your network to see if there is anyone that is interested. You can also find out if there is a competitor that could benefit from buying your business.
Be careful, however, not to share sensitive information without having an NDA in place!
Alternatively, you can list your business on an online marketplace. This will give thousands of potential buyers’ access to it and anyone searching for a business for sale online will, hopefully, come across your listing.
How do you value goodwill for a small business?
Goodwill makes up a significant portion of the value of a business but, due to its intangible nature, it can be difficult to assess its value.
The value of your goodwill be higher if you have a good standing in the community, you have solid relationships with your customers and suppliers, or you have protected intellectual property that gives you an advantage in the market.
There are several methods used to calculate goodwill, however, most importantly, the value will be what someone is willing to pay for your business. Find a professional to help with the valuation if you are unsure.
How long does a business take to sell?
This answer will obviously vary depending on the business and the sector that it is in. In general, however, it takes 6 to 9 months to sell a business. Some business owners find that it can take a lot longer if there is a downturn in the market. If it is priced correctly, it will sell quicker.
How to know when to sell your business
We have created a guide to help you through the process of selling a business. If you are struggling with the decision of when to sell, read the section on timing the sale of your business.
How do I sell an existing business?
Our guide to selling a busines will take you through this process step by step. If you still have questions, you can employ the services of a broker to help you.
This guide will give you a good idea of what it is that you need to consider when it comes to selling your business. Go through it carefully to make sure you have not forgotten any of the important steps.
Alternatively, why not contact our customer services team to get some advice!
Should my accountant sell the business for me?
An accountant can play an important role in the sale of your business. If you are putting together a team to sell your business your accountant will be valuable in ascertaining the value of your business and they will be able to prepare for the due diligence. In particular, they can get your financials into better order so that you are more likely to attract a buyer. An accountant will also be able to work out the deal structure for you.
Unless your accountant has experience in selling business, though, you may need to find a broker or agent that can help you to find a buyer. Finding someone who is familiar with the valuation of businesses could also be necessary if you are to get the best results possible.
What happens to cash when selling a business?
The seller of the business will keep the cash on hand as well as the accounts receivable. The buyer takes control of other assets such as merchandise, equipment and the brand itself.
This is not, however, true for all businesses and can vary from one instance to another. Some buyers will take over the accounts receivable in a business so that they can immediately start dealing with customers and get cash flowing into the business.
What is a disclosure letter?
A disclosure letter is an important part of the sale of any business. It is a document where the seller will make any disclosures against any warranties that the buyer will need the seller to give.
This document will usually be prepared by the seller’s legal team for the buyer. Usually, the seller will need to put as much detail and information into the letter as possible. The seller must make sure that the buyer is able to gain a full understanding of each of the matters disclosed.
If, as a seller, you are unsure as to whether something should be included or not, err on the side of caution and put it in.
What is an NDA?
A Non-Disclosure Agreement (NDA) is a document that will protect the seller during the due-diligence process. Any potential buyer will be accessing information about your business, its finances and other sensitive information. It is vital that you have an NDA in place in order to protect your business.
Ask for professional advice when drafting an NDA to make sure that you have included everything in it. This can include employee information, details of your products, your technology or innovation, financial information and databases.
How to sell your small business without a broker
If you want to list your business and reach thousands of potential buyers, you should list your business online. Without a broker, you will still be able to hear from a wide range of potential buyers.
You will need to take a more active role in the sale if you are going it alone. You will, however, also be able to avoid paying the broker commission. You might still need to consult a lawyer or accountant during the sale, though.
How to sell your small business with a broker
When you are looking to sell your business, you will need to keep your foot on the pedal right up until you hand over the keys. This may mean that you don’t have the time to sell your business yourself. You might also be unfamiliar with the process and so need the help of a professional.
A broker will be able to handle much of the sale for you including drafting the terms of service and the negotiations. Make sure that you find the right broker for you and one that you can trust with a good track record.
How do I choose a business broker to sell my business?
You will need to find the right broker for you and your business. In order to do this, you should find someone who has experience in a similar sector to you as well as with businesses a similar size to the one you are looking to sell.
A great way to gauge the skill of a broker is to talk to their other clients, if possible. You should also be able to completely trust the broker that you choose. Make sure you select someone you can see yourself building a good relationship with.