Once you have made the decision that selling your business is the right decision, there are many steps to take and many more decisions to be made before announcing to the world that your selling your business. The first thing you need to consider is whether you will attempt selling your business yourself or whether you will appoint a business broker to do it for you. If you want to try selling your business yourself, you need to ask yourself a few basic questions and consider the following before appointing a business broker:
Do you have the right resources to create a good marketing strategy to get your business noticed?
Do you have the time or patience to handle enquiries while working, running your business and selling your business at the same time?
Do you have the experience and negotiation skills to navigate selling your business?
Do you know about the legal requirements to complete a successful sale selling your business?
Do you know where to find the right professionals to assist in preparing the right documentation needed for selling your business?
Do not be fooled into thinking that sales of Real Estate (ie property) are the same as business sales. They are in fact very different. Selling a house can be as easy as putting a “For Sale” board up in front of your house and placing a few ads in the local paper and a couple of websites then wait for people to come and inspect. Selling your business is more involved and is why a business broker can help.
How is selling your business different you ask? Well for a start when selling your business most vendors don’t want people to know that their business is up for sale. They could be worried that the staff will find out and start looking for other jobs before the new owners fire them. This will disrupt the business and possibly affect its value when selling your business. A business broker can assist with selling your business.
Most vendors don’t want their competitors knowing that they are selling. In fact the only people that they will want to know they are selling are the people that will want to buy it. But who are these people and how will you find them? You may be one of the extremely lucky few when selling your business that have already been approached by someone who has made you an offer that is too good to refuse. If that is the case CONGRATULATIONS! You have won the lottery of business sales. Be aware though that an offer is simply that. Have you qualified them? Do they actually have the interest AND the finance?
For the majority of the business owners out there, believe me when I tell you that selling your business is NOT that easy. You really do need a professional. Someone whose job and livelihood depend on selling your business and other businesses on a daily basis. How to separate the chaff from the wheat and find a true professional when selling your business. A business broker who will keep your best interests in mind when selling your business and TRY to achieve the best possible result. Always remember that YOU are always the one in control of the whole process selling your business.
At the end of the day when selling your business if you don’t want to sell at the price being offered by the purchaser, you don’t have to accept the offer. It is up to the business broker to find you as many prospective buyers as possible and try to get the best possible outcome selling your business. Your business broker should be working for you and selling your business as a business broker, not the purchaser, as you are the one that will be paying the business broker commission. It is very important to choose the right business broker to act as your representative and to make sure that business broker has the experience and know how to generate the required level of interest and to create the best possible exposure selling your business.
But how do you know what to look for in a business broker selling your business and making that choice, you ask? Well it is like any other decision in life where you put your trust in another person to do a job for you. To ensure that you find the right one, you need to interview a business broker for selling your business, just like you would do when looking for new staff for your business.
Has the business broker themselves owned a business before and personally been through the process of selling your business personally?
How long has the business broker been in the industry?
Has the business broker sold businesses like yours before, particularly in the recent past?
Does the business broker have testimonials from clients?
Can they explain the procedures they have in place to make sure your privacy is protected?
Don’t forget to ask for receipts for any money paid for advertising (this should be a TRUST ACCOUNT receipt) as well as a breakdown of how the money you pay to the business broker will be spent in selling your business.
Can they give you an accurate appraisal for your business in the CURRENT market?
Or are they quoting higher unrealistic figures just to win your business?
The emphasis is on accurate, as there have been many instances where the business price was greatly exaggerated to impress the vendor. Beware of business brokers who say that they already have people on their database waiting to buy a business like yours. Most often than not it is a ploy used by some to create a sense of urgency and induce you into signing up with them suggesting that if you don’t, you will miss out. If you want to test their honesty, offer to sign up for a 7 day Exclusive Authority only. This should be more than enough time for them to produce buyers. If they do not accept this arrangement it could mean that they were not being entirely honest.