A huge percentage of businesses listed for sale never witness an exchange of hands. This can be a worrying bit of information if you are planning to sell your business. However, the good news is that with some careful thought and thorough preparation, you can make a successful sale.
When it comes to selling your business, the preparation should start at least two years before listing the company. You need to ensure that all the records are well maintained and the business machine is running well and is in excellent condition. All employees should be in place and every aspect of the business well defined and well taken care of.
When it comes to selling your business, business brokers are indispensable. No matter what the size, it is never easy for an owner to sell off a business that has seen plenty of investment of money and hard work. This is where a broker is helpful.
While you can sell your business alone, it can be very time consuming and complicated. Selling a company involves a lot of complex processes which are best handled by someone competent. Most brokers have a great deal of experience and expertise in selling a company.
Here are some key factors to keep in mind before you take the crucial decision to sell your business.
Know the market demand – The first step is to do some research and understand the market. A broker can help you take stock of your business and do a quick analysis of the market to know the current prices and trends in your particular industry. The right guidance from your broker will prevent you from putting a very high price to your business or undervaluing the same. Fixing the right value for your business will help you strike the right deal faster. With professional help from a broker, you can aim to reach a price that will draw the maximum clientele and, at the same time, offer you the maximum value.
Organize your paperwork – Efficient bookkeeping is crucial to ensure a smooth deal. Plenty of documentation is generally required before a deal is finalized. Your broker will be able to guide you about the documentation related to selling. Your financial reports, records of sales and expenses, tax details and such other things should be properly maintained. If you are facing any legal issues, it is important to resolve it before you sell your business.
Network – Apart from listing your business online, you can benefit a lot from networking with your family and friends. Networking will ensure that the word spreads about your intention to sell. You can also hire a professional broker to help you get in touch with prospective buyers.
Negotiations – There are many things that are involved while buying and selling a business. A broker can serve as a mediator who brings the seller and the buyer together and ensures that the process goes on without any issues. Also, negotiations can collapse when there is not proper follow up and this is where business brokers can be helpful. The broker will follow up with the buyers and sellers and ensure that the process goes on without a hitch.
Well-maintained business premises – Apart from closing the different aspects of your business, it is also essential to ensure that your office premises are clean. A well maintained office often indicates good organizational abilities and will help you in your selling process.
Quick sale – Many potential buyers approach brokers to buy businesses. Therefore, when you contact a broker and ask him or her to help you sell your business, it is likely that he will sell it within a shorter time. This is due to his or her contacts and networking groups who may be interested in investing in your industry.
Confidentiality – It is not very easy to maintain confidentiality while you are marketing your business. This may be because you do not possess the right skills to protect your vital information. A broker can undertake proper marketing while protecting all confidential information about your business. This is important to protect your customers, employers, and your suppliers from knowing that you are planning to sell your business. Confidentiality also helps keep the business stable.
It is not impossible to sell your business in a stress-free way when you have a broker. An experienced broker understands the process, can answer questions, offer guidance, and help you avoid mistakes. He or she can provide a wide range of services including valuing the business, ensuring proper documentation, and screening prospects among others.
You need to keep the business running well if you want to sell it at the best price. Selling a company on your own can be a big distraction that may degrade the business performance and profits. Also, in the present buyer’s market, it is important to be very prompt in your communication. Else the buyers can lose interest and start looking for other opportunities. If it seems like a lot of work to sell your business while running it, it is; this is why it’s best to hire a broker.
It can take some effort to find a dedicated and knowledgeable business broker. Make sure to enquire about the previous deals that the broker has helped close in the last couple of years. Check the references. Also ask if you would have the right to terminate the agreement in case you are not satisfied with their service of helping sell your business. Walk away if there is no such provision. Enquire about the type of businesses that the broker has been buying and selling.
Finally, do not forget to ask about the brokerage fees, and the role that you would have to play till the close of the deal. It has been seen that the costs of hiring a broker far outweigh that of the costs involved while trying to sell your business alone; however, most owners find it worth the cost.
With plenty of good reasons why a broker can help sell a company, it’s no wonder that most of the businesses that are sold ultimately involve the help of a business broker. With the right professional in charge, you can sit back and focus on the other aspects of your business while he or she works to sell your business off at the best price.