How to sell a business. What you should know…
Should You Consider Selling Your Business?
Selling your business is a big decision. You have committed your time, money and energy to building this company. Business owners have many motives for wanting to sell. The most common are: burnout, retirement, desire for a new challenge, health problems, dissolution of partnership, lack of working capital and divorce.
You have decided that now is the right time to sell and you need the best professional guidance you can get. This should include your accountant, attorney and a professional business broker. The right team can mean the difference between getting rid of you company and selling it for the very best price and terms.
How Much is the Business Worth?
Most sellers have some idea about what their business should sell for. This is taken into consideration, but the business broker is familiar with the local market, and by reviewing financial information can make a recommendation of what he thinks the business will sell for. A range is normally set with a high and low price.
Better Business Brokers will review your business operation and its financial records, then use techniques proven in the Dallas area to assist you in determining the fair market value of you business in today’s marketplace. The sellers must realize that a buyer will pay for what a business is worth today – not what it might be worth in the future.
Finding the Right Buyer
Better Business Brokers will guide you through the time-consuming process of finding the right buyer, negotiating the many details of the sale, and working closely with the accountants and attorneys involved.
We use many different personal interviews with prospective buyers to determine their individual requirements, goals and objectives. We also discuss the financial resources they have available to purchase a business.
Steps of Selling a Business
We will help you step through the process of selling a business by:
- Initial consultation about selling your business
- Valuation of the company
- Establishing the appropriate price, terms and security
- Preparation of a business summary
- Preparation of comprehensive package for presentation including balance sheet, profit and loss statements
- Opportunity for new buyers
- Qualifying potential buyers
- Schedule and Attend meetings between Buyer and Seller and/or Professionals
- Consulting on the Offer to Purchase Agreement
- Escrow buyer funds for closing
- Negotiating the transaction
- Assisting you through the transaction closing process
Better Business Brokers engages in transactions that require the utmost level of confidentiality, similar to the relationships of attorneys and CPAs with their clients.
We will not discuss any confidential details concerning your business over the telephone, nor will we give confidential information to potential buyers until they have signed a confidentiality and nondisclosure agreement.
What To Do to Help Sell Your Business
It’s extremely important that you continue to run the business in an aggressive, growth-oriented way. Do not let up on the business operations while your business is for sale. You should make the most of your decisions based on the best interest of the long-term objectives of the company.
Maintain up-to-date financial information. Work with your accountant to provide monthly statements with year-to-date numbers. Buyers want real date, usually no more two months old.
Understand the tax implications before setting the selling price. This may very well require the assistance of a specialist in this field. Your company accountant is an expert at keeping the records of the company, but may not be completely up to date on some of the latest structures that can be employed to reduce your total tax burden. An effective tax plan can let you price the business much more attractively without sacrificing your total return. This is a critical step in developing a win-win transaction.
You should also be prepared to close quickly. Once a agreement is reached between buyer and seller, buyers generally want to close as soon as possible. It is a fact that businesses rarely improve between the time a seller signs a contract, and the closing. Customers, key employees and competitors may react in different ways when they hear of a sale. The sooner the new owner takes over, the sooner some of those fears and anxieties will go away. If there are actions that you have deferred, such as maintenance or repairs, you should take care of them at once. There will be a lot to do as the closing approaches, so everything that can be done in advance of an offer should be done. #1 Dallas Business Broker.