Selling Your Small Business Tips

Selling your small business can be extremely challenging. Most businesses offered for sale will never transfer hands, according to Bizbuysell.com. Bizbuysell is the largest business-for-sale website in the world, and they report that 40% of companies are never sold. The current business broker model stopped working for small businesses long ago. Business brokers have not evolved with technology and how people make buying decisions in the case of small businesses. Your chance of success with typical business brokers is not good, but if you are lucky enough to sell your business, be prepared to give hard-earned profit to the business broker. Many business owners who are reading this page may have tried to sell with a business broker it didn’t work for a reason probably listed below:  

 

Why So Many Fail at Selling a Business?

 

Incorrect Pricing

Too many business owners set the wrong or unrealistic prices and never get a single offer or any serious interest. You can have this problem If your price is too low or too high. You must be familiar with pricing models that include: multiples of income, debt capacity, comparable sales data, discounted cash flow, and other pricing models to value your company accurately. Failure to know proper pricing will leave too much money on the table or join the 40% that never sell their company.

Too Little Advertising

You must have a large audience of people interested in buying a business or your chances for a successful transfer significantly diminish. You must be listed on the highest-traffic business-for-sale websites, or you simply won’t be seen by enough potential buyers.

Giving Up Too Soon

You must be realistic and know that it takes time to sell a business. Every business is different, and you should plan for at least six months. You have worked too hard in your business not to sell your company for the highest price. You will be rewarded for your patience.

Not Using Social Media

You must have multiple sources, including social media, to get your opportunity in front of thousands of buyers daily. Social media gets to people that may not be looking, but your offering catches their attention, and you get more potentially motivated buyers.  You must go to where the buyers are. 

 

Not Keeping to Transaction Confidential

Your company can be harmed if customers, suppliers, or vendors find out the business is for sale. Everything must be kept secret until after the buyer has paid you.

 

Lack of Financial Statements & Documents

You must have all the proper documents before you put your business up for sale. At a minimum, expect three years of tax returns, equipment lists, and year-to-date financials.