Tips To Sell Your Business In This New Economy

6 Tips To Sell A Small Business Successfully In The New Economy

By : Peter Siegel, MBA  
  Current news reports about ups and down affecting the stock market, employment numbers and consumer confidence in the economy have an impact on those who want to buy a small business as well as those who have a business opportunity for sale. The mood of uncertainty causes entrepreneurs to hesitate before moving forward with plans. And those seeking business purchase financing, must learn to navigate through a lending environment still reacting to the banking crisis of 2008 and the resulting recession.

Fortunately, the owner of a retail shop, service company, restaurant or other small business who wants to sell, can rely on some smart strategies to help overcome obstacles and succeed with a satisfactory sale. Here are six of those ideas.

1. Be certain you're ready to sell.  This is not a good time to offer the company on the market just to "test the waters," or because a persuasive business intermediary wants a listing and claims he can get a great price. The moment of truth may come to a seller who is merely exploring the market but is not fully committed to turning over the company to someone else. If the intermediary brings an offer from a qualified buyer who matches price and terms of the listing, the seller probably will owe a commission whether or not he signs the deal.

2. Organizing materials about the company, including up-to-date financial information, into a presentation is more important now than ever. There are more serious buyers now than at any time in the past generation or two, thanks to the insecurity in the job market. Many people have stopped looking for work and started looking for a way to secure the future with business ownership. But there is intense competition from a number of baby boomer owners ready to retire.  And most buyers in today’s economic climate are not going to send time investigating any opportunity for which there is not a lot of solid and positive information.

3. Develop a business plan and a marketing plan to go along with the basic background profile covering the business for sale. A document that gives buyers ideas about expanding markets, adding to the company’s capabilities to generate additional revenue, is an important sales tool.  A skilled business intermediary can help with this project.

4. Choosing the right intermediary - the licensed business sales professional - to offer the small business for sale, devise and implement a strong marketing campaign, and give valuable market feedback to the owner, is critical to the process of selling a small business.   This is no market for amateurs. The seller who’s serious about getting results when the company is offered to the public, needs to interview at least three potential intermediaries about listing the business and make sure to get references from each. And then, spend the time and effort to actually contact those references. Key attributes to look for in a listing broker are experience marketing your kind of business, and knowledge of how the industry has changed, along with the ability to adapt to those changes.

5. Get the business prequalified for financing. Of course, it ultimately is the buyer who’ll need to qualify for a loan to buy your business, but it still is an excellent strategy to have a business purchase money lender to evaluate the company. The seller and buyer with a deal containing a loan contingency will be able to move quickly if there is a lender who knows the company and is willing to help fund its purchase. It’s a powerful selling point when offering a small business for sale that has been preapproved for a purchase loan.

6. The owner who is prepared to help finance part of the purchase for the right buyer will have a better chance of selling the business at an acceptable price. And if the business value has declined with the slowed economy, but you think things will improve, you may be able to achieve a higher price with a creative deal structure. Perhaps some form of earn out agreement can be reached with the buyer. It will establish a selling price that may be more favorable for the buyer than the seller, but the price can be subject to change for the better, and the payments to the seller increased, if the company becomes more profitable in an improving economy.

Challenges presented by circumstances of the New Economy require that an owner wanting to sell a small business learn to adapt to current realities. That will increase the chances of achieving a sale and at a price that will match or come close to the dollar amount the seller wants to receive.

For a complimentary consultation:
Contact  Cecil Williams (cecil@bizbrokerflorida.com) or call  at 888-925-5055 ext.206.  Visit my personal website to search for business for sale in Florida www.bizbrokerflorida.com  Also, visit our Florida Business Exchange website at www.fbxbrokers.com