Sell a Small Business

If you are a business owner planning to sell a small business, you should be aware that the process is quite unique. Most business owners think that the process of how to sell a business is the same as a real estate deal when it is, in fact, very different. This article will explore some of the steps involved in selling a small business. Talk to a Business Broker If you plan to sell your smaller business within the next 12 months you should probably meet with a reputable business broker in your area. Ask plenty of question involving the process. Determine a Listing Price For most small businesses for sale, a qualified business broker can assist you with determining the asking price. The business intermediary will likely calculate the business discretionary earnings and use an industry multiple to come up with a realistic range. Please bear in mind that pricing a small business is both an art and a science. You can also consult with a chartered business valuator to assist you. Business Marketing Summary The next step in the selling process involves the business brokerage professional creating a marketing package. The package does not normally include the business name as most business owners prefer not to announce to their customers, employees or vendors that they are selling. The marketing package usually involves a business and industry summary, outlook and summary financials. Advertising the Business For Sale The brokerage would then normally advertise your small business for sale. This usually involves targeted advertising and working an existing database of people that have expressed an interest in buying a smaller company. Qualifying Interested Parties Advertising the business usually results in many inquiries on the business. The vast majority of these prospective buyers are either unqualified or are not serious about purchasing a business. A business broker must interview all of these candidates to determine a short list of serious people interested in the business. This is a critical part of the process. slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip slotxovip Show the Business After the prospective buyers have been qualified only then will they be invited to see the business and meet the existing owners. This initial meeting is critical. Although the financials and other information presented so far is important, the meeting with the sellers is key in that it establishes trust and rapport between the buyer and the seller. Selling a small business is a much more personal transaction than real estate so this step is especially crucial. Offers If a buyer is interested at this point, then they would be invited to submit purchase offers on the business. Offers are usually conditional and some normal conditions include things like financing, lease review and assignment and due diligence. Once a conditional agreement is in place then due diligence normally starts right away. Due Diligence This is the time in a business transaction where the seller must open all their books and submit their small business to the full scrutiny of a buyer. It is an important process and if not managed properly a sale can quickly fall apart. Communication and and efficiency are important elements to a successful due diligence process. Closing the deal Once due diligence is completed and all conditions are waived then a deal is said to be firm. The next step is to proceed onward to the closing date and a smooth transition. The above steps are a brief summary of some of the major elements involved to sell a small business. Every sale is unique so please use the above as a general guide. Consult with your professional advisors and a business broker if you are seriously contemplating selling your business.