Sell your business fast with these business broker tips
TIP 1: Know Your Why
Selling a business takes a great deal of motivation. So, it’s important for you to understand why you want to sell. ‘Know your why”will affect every part of the sale, from the decision to sell, pricing, timing, etc.
For many business sellers who are in a hurry to sell their business, they may limit their time on the market to expedite their business sale. Yet, to maximize profit, you may need to provide more time and be patient. Knowing your why will help your decision-making process go more smoothly.
Keep in mind that once you “know your why”, however, you don’t need to share that with the buyer. You don’t want to gift your vulnerability as leverage to a prospective buyer.
TIP 2: Know Your Numbers
Deciding on a list price for your business is not a casual decision. To sell your business fast, do not skimp on the time and effort necessary to perform a solid business valuation.
When you list your business for sale and set the price point, you are indicating the maximum amount for your business. Most businesses do not sell for a full price offer. Yet, if you price it correctly, it should sell close to the list price.
Business sellers should know how their business value is determined correctly. Business pricing should defensible and based on the financial facts of the business. Price too high, no one will be interested in your business or take you very seriously. Price too low and you shoot yourself in the foot.
We can’t stress how important it is to get the business valuation right. A skilled business broker will have the knowledge and tools available to give you a current market valuation. Trying to go it alone, leaves you vulnerable if you don’t know how to perform a business valuation. Getting a business valuation is part of the preparation for a good business sale. When it’s a defensible valuation, it makes the business sale process go smoother because it’s comprehensible to the buyer, SBA lenders, accountants, etc.
Not having a business valuation forces sellers to justify their pricing. The price may not reflect the actual value which not only slows the sale process down but also may place one party at a disadvantage and compromise business loan financing needed to sell the business.
TIP 3: Give Yourself Wiggle Room For Negotiating Price
Oftentimes, business valuations will provide a range for the business value. While we determine the list price, start with the minimum price you would accept, and then pick the price you’d get if the world were perfect. This gives you a range to keep in mind when working with your business broker to negotiate the sale.
Also consider your priorities —maximum profit or quick sale? The quicker the sale, usually means the seller accepts a lower sales price.
When setting your asking price review your priorities. Do you want to maximize your profit or sell quickly? You’ll price high for the former and closer to market value if the latter is the case.
TIP 4: Clean, Fix, Repair, Upgrade
To sell your business fast, you want your business to be appealing to buyers. Make sure everything is clean, in good-working order, maintained, repaired, etc.
Remove non- functioning, furniture, equipment and/or fixtures. No one wants to look at junk laying around, especially a buyer for your business.
Get your business ready so that it looks good, smells good and functions as its supposed to. Avoid procrastinating any repairs.
Since you only get one chance for your business to make a first impression, make the best presentation possible. To sell quickly, you want to encourage buyer prospects by impressing them with your business.
TIP 5: Prepare & Organize Your Business Records
Preparing and organizing your business and financial records prior to sale is a must. You will need these records to prepare your business disclosures, your marketing materials and to provide to the buyer.
Once you have an offer and enter in contract, the first phase of business sales contract involves “due diligence”. Due diligence involves the buyer asking your for all your business records to determine if they in fact support your claims regarding business performance. Having your records on the ready shows a buyer that you are serious, focused and professional.
Ideally you should have all records organized PRIOR to marketing your business for sale. Having all records on the ready will help you sell your business fast.
Additionally, disclose everything — the good, bad and ugly. It helps build trust with the buyer and prevents legal headaches later on.
TIP 6: Check Your Ego
Negotiating the sale of your business can be a highly emotional event. Don’t let it be. Avoid emotionally attachment to a price, term, etc. Approach selling your business in a business like manner.
Sellers who are overly emotional and too attached to their business, may tend to sabotage their business sale by taking negotiations far too personally. This will not only slow down the sale process but also tends to create havoc in the sales process.
Gain the advantage with prospective buyers who get caught up in the emotion of the situation by remaining stoic, calm and collected. This may very well be the biggest transaction you ever negotiate — letting your emotions override reason is not a mistake that you want to make since it risks a successful sale.
TIP 7: Don’t Waste Your Time On Looky-Loo Buyers
Carefully screen buyers. There’s a lot of tire-kickers in business sales. They waste a lot of time, burn everyone out and slow the seller’s sale process down considerably.
As soon as practical, determine how much your buyer is willing to buy your business, the size of their down payment and whether they are creditworthy. Set the expectations that your buyer should be ready, willing and able to buy the business at the time of their offer. If not, then don’t waste your time on “looky-loos”.
Be clear before advertising your business, what their qualifications must be; how much deposit they need to put down and what kind of credit score they must have. Have buyers produce information at the start, along with their Non-disclosure Agreement (NDA) that shows they are qualified buyer that is ready to go. Otherwise, don’t waste your precious time on the insincere.
TIP 8: Politely Stand Your Ground with Low Ball Offers
If an offer is inadequate, make sure the buyer is qualified and capable of buying your business opportunity. If not, then do not waste any further time
Otherwise, find out from the buyer their reasoning for their offer. They may need additional information to help them see their offer is too low such as comparable sales information for similar businesses like yours that should have been completed during your business valuation.
Do not take the low ball offer as an insult offer or take it personally. Instead, treat it as if it’s a reasonable offer and respond with list or a slight reduction in your asking price. This lets the buyer know that their first offer is not realistic or that you are not desperate or that you are not going to let them sniff out your lowest price possible.
If you’re clear about your business valuation and know that it’s defensible, then avoid further negotiations if the buyer doesn’t get realistic about pricing.
Tip 9: Avoid Setting A Deadline for The Business Sale
Setting a deadline can create unnecessary pressure and stress on you. It also does not help sell your business fast. It will not move the sales process forward any faster. It may also cause you to act hastily, especially in negotiations, which may be to your determinant.
Tip 10: Maximize Prospective Buyers to Sell Your Business Fast
To sell your business fast, you need to make sure that your business opportunity is advertised broadly.
Getting the word out everywhere possible, highly increases your chances of selling your business quickly because you will increase the buyer pool. More buyers equates to more offers. If you are lucky or have a great opportunity, you may get several offers competing for your business. This is a distinct advantage to getting a favorable outcome on the sale of your business.