by shashiprakash911@gmail.com | Sep 9, 2022 | Business For Sale
You’ve spent a lifetime building up your business. Whether you have always planned to move on or are selling your business due to the continuing pressures exerted by the many recent economic downturns, you will be looking to achieve the greatest profit attainable for your efforts.
That is why it is so important that the sale be handled correctly. The goodwill that you have established over the years with customers, employees, suppliers, creditors and neighbors is something that is not easy to put a price on.
The owner of a business is usually one of the last persons that should be considered to handle the sale of it. For the often rough and tumble negotiations likely to ensue in the business marketplace require the utmost objectivity. Because you are probably too close to it to make an effective, unbiased presentation. You are likely to be too emotionally involved in ‘your baby ‘ to maintain the needed distance during the many details of the sales process.
There is just too much riding on the outcome of the sale to allow yourself to fall into a do it yourself mentality. While such approaches have their place, not when it comes to your livelihood. Hiring the best is the best way to achieve your desired results. That is why a record number of businesses have made the smart choice of securing the services of local business brokers to handle all of the many details that make up selling their business. Business brokers like Murphy Business Brokers have already amassed all of the specialized know-how through years of local experience.
You have more important things to do than to waste time reinventing the wheel. Business Brokers like Murphy Brokers, one of the acknowledged leaders in the field, know the ropes and will steer you clear of the many potential pitfalls.
Business Brokers consistently get the best prices when selling business because that is their forte. Put their skills to work for you and experience the difference that a successful selling price brings.
Murphy Business brokers are experts at communicating with authority the intangible benefits that are obtained when a buyer invests in an existing concern rather than building from the ground up.
by shashiprakash911@gmail.com | Sep 9, 2022 | Business For Sale
Here are some of the obvious, and not so obvious, steps you can take as you get ready to sell your business:
- Clean the premises
- Organize the books and records
- Deal with any customer/vendor/employee issues prior to the sale
- Try to increase revenues without sacrificing margin (increasing revenue is important to the buyer as they analyze trends)
- Diversify the customer base (customer concentration is a risky issue for buyers and their lenders)
- De-emphasize owner’s personal role in the business by not being the only decision maker
- Get other employees involved in customer and vendor contact
- Develop a management team or a right hand person
- Build infrastructure to further reduce dependence on the owner
- Reduce the # of family members working in the business, especially if they will be leaving
- Reduce the amount of owner’s perks that are paid for by the business
- Don’t live out of the business checkbook
- Sell or remove unnecessary or personal assets
- Adjust inventory to a normal level
- Other smaller items include: update website, renew leases, eliminate unproductive employees, collect past due accounts receivable
by shashiprakash911@gmail.com | Sep 9, 2022 | Business For Sale, Buy a Business, For Buyers
Prospective business buyers often make the terrible mistake of being overzealous when talking with a seller for the first time. I get it; you’re excited. Perhaps you have spent a ton of time looking at listings and do not want to waste any time on potential businesses that fail to meet your criteria. However, what you say and how you come across when you first engage a seller is critically important and sets the tone for continued discussions.
Can’t We Just Get Along
Your initial goal is to introduce yourself to the seller/business and get a general idea of how it operates. Your first conversation should be to outline what you are looking for in a business, as well as to convey that you are a serious buyer. It is also the time to get a first impression of the other party. Before a seller will divulge any material information, you will be required to execute a non-disclosure agreement and moreover, it is something you should immediately offer to do for the seller. It will put them at ease that you are: a) familiar with the process, and; b) sincere about your intentions.
Don’t be A Bully
There is no bigger turn off than a buyer who comes across as overbearing or a know-it-all, or who acts rudely and immediately requests detailed financial or other confidential information. The process to buy a business is just that a process with specific steps along the way, including the dissemination of information pertinent to making a decision. It all comes in due time and each seller may have a different agenda for giving you that information. Be patient and sensitive to the fact that this may be new to them as well.
Key Questions To Ask The Seller
There are numerous key questions to ask every seller, including:
- What is the history of the business?
- What are their day-to-day responsibilities?
- What challenges do they face?
- What have they done to grow the business?
- Why are they selling the business?
- Are there any key customers, suppliers, or employees?
- Can the lease be easily transferred to another party?
- What special licenses (if any) are needed to run the business?
- How did they arrive at their asking price?
- Are they willing to finance part of the deal?
- What training will they provide?
- Who are their main competitors?
Do Your Research
Parallel to the seller questions is learning about the industry. The Internet is the greatest tool to come along for buyers. There is a wealth of detailed information on every industry but keep in mind that you are probably looking at a local business so do not go overboard with global trends or using billion dollar companies as a comparison that will have zero impact on the business you are evaluating.
The Goal Early On
In the early stages of evaluating the business, there are three key questions you should ask yourself:
- Do I like the business?
- Can I see myself running it?
- Do I trust the seller?
Buying a business is a huge responsibility and it will change your life. Its important to do your due diligence, get to know the seller, as well as gain a very clear understanding as to what you’re getting yourself into. Buying a business is also an exciting opportunity. This is your chance to be your own boss, grow a company and make it your own.
About The Author
Richard Parker is the author of How To Buy A Good Business At A Great Price, the most widely used reference resource and strategy guide for buying a business. He has purchased ten businesses in his career and has helped thousands of prospective buyers worldwide learn how to buy the right business for sale. He is also founder and President of Diomo Corporation – The Business Buyer Resource Center.
