Selling a business is not a simple process. It may take longer that you expect. The average time to sell a business is 10 months.
1. Be prepared to make full disclosure of your business liabilities. If you have a lease(s) for equipment, line of credit or finance the purchase of equipment, be ready.
2. Selling your business is a specialized process, so utilize the expertise of your attorney and your accountant.
3. Know before negotiations how much you want for your business and why.
4. Price your company fairly. Purchase values usually only vary about 10 percent.
5. Be willing to remain with the business for a while or be a consultant.
6. Stay flexible. Selling is a two-way street. Try to put yourself in a buyers position. “Am I buying a job? With this amount of investment, I expect a return on my money.”
7. Be creative, there is a solution to most problems.
8. Focus your time and energy on selling.
9. Pursue each potential buyer with fervor and stay positive.
10. Don’t let negotiations drag on: Deals can atrophy with age. Buyers will always keep several options available until they know you are the onel.
11. It only takes one good buyer to make a good deal.
12. Keep your options open until you achieve your goals.
13. It isn’t enough to ask intelligent questions; you have to listen intelligently to the answers.
14. Listen to your advisors, but make your own decisions. Attorneys will never recommend you take a seller note. What if it goes bad, your attorney is than liable for his advice. Think of it…they are protecting you…right out of the deal. They are protecting themselves. It is a business decision you will need to make.
15. Buyers are willing to pay for the free cashflow the business is generating to the owner. Not, Pie in the Sky, “but if you do this the business can do really well”.
16. Have your Tax Returns ready for the last 4 years. It is the best proof of what your business generates for profits. If your returns do not show cash flow, a bank will not lend money to someone who want to buy.
