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Selling a small business can be a complicated endeavor and involves several considerations including time. To start with you will need to identify the reasons why you want to sell; make sure that your business is in the shape it needs to be in to be sold; will you able to attract a buyer?; how much might someone pay for your business?; What should you expect between now and the time your business changes hands? Additionally, you will need to decide on whether you enlist a broker, an accountant, or a professional to make the business sale. In this post, we will help guide you through the process of selling your business.
Selling Via a Broker Vs on Your Own
Deciding to sell your business on your own or using a broker has both advantages and disadvantages. If you want to sell your business you will need to know the actual value of your business. The valuation here is important because you will need to determine the true worth of your business. It is equally important to make sure you don’t price it too high or too low. By appraising your business you let a potential buyer understand the potential of your business as a money-making enterprise and also add credibility to the asking price.
You will need to develop your marketing plan and generate a strong pool of prospective buyers to actually get what it is actually worth. You as the business owner with a little help from an accountant can offer a good picture of the value of your business- after all, who besides you knows more about the business? However, if you go on your own, it can cost you time and a lot of money.
If you go on the broker route you will understand that brokers will handle a lot of the heavy lifting that includes the valuation and prospecting in exchange for a commission. They can manage the marketing and sale process while allowing you to continue running the business. Brokers have extensive experience, networks of potential buyers that can help you sell.
However, you cannot expect your broker to be more motivated, passionate and knowledgeable about your business than you. A broker may help in expediting the developing of documents and reaching out to prospects but you too will need to step in to promote the sale of the business if you want to ultimately get a good price for it.
How to Find the Best Place to Sell Your Business
There are several ways places to sell your business. Each has its unique niche however for you to see encouraging results a combination of one or two options can help for successful results. Below are some options of where to buy a business:
Through a Business Broker
Selling a business is a major business decision, and you need the help of an experienced broker that you can trust. When selecting a broker you will need to do your due diligence. A good broker can guide you through the entire process to help you sell your business that includes your valuation, marketing and ultimately the sale of your business.
Through an Online Group
Online groups are also a great place to find a prospective buyer for your business. They allow you to start conversations, post advertisements as well as give advice and respond to queries from those interested.
Your Larger Network of Connections
You can leverage your larger network of connections to put the word out that you are looking to sell your business. Your network can include business associates, co-workers, and even employees. Make sure that you fine-tune your pitch and convey clearly the advantages the potential buyers can get through acquiring your business.
Selling Your Business via Social Media
You can about selling your business through social media networks such as Facebook, Twitter and LinkedIn. You can use them to generate interest in your business as they offer valuable resources that can help you throughout the process and attract qualified buyers.
Your Local Chamber of Commerce
Your local chamber of commerce can not only let you access some badly needed resources for your business but through its extended network help in generating a good pool of potential buyers.
Ads in Local Media
By posting ads on your local media you can help reach a wider audience within your community that might be interested in your business.
An Investment Bank
Investment banks are also a good place to look for buyers for your business. They come with not only capital for purchasing your business but also the business acumen to expedite the buying process. It is important to note that businesses that are sold through investment banks come with a substantial price tag of over 20 million dollars.
An Online Listing Website
Online listing websites can help you weed out the window shoppers from the true buyers when selling your business online. They offer specialized services such as categorization by industry, location, and even price. They not only are great platforms for those seeking to buy or sell a business but are also packed with great insights and resources. Below are some popular online listing websites:
Best Sites to List a Business for Prospective Buyers to View
Selling your services online is a great way to build your business online and increase your profits. There are dozens of sites you can choose from, and your pick depends on your budget, services, and sometimes your location. This includes some free listings. You might be distracted with the initial number of interested buyers responding to your business for sale ad, but understand that a majority of ad respondents never make a purchase. That’s why it’s important to distinguish those simply shopping around from those that are qualified to buy your business.
Make sure you carefully read the terms and conditions of each platform for any fees, restrictions, or other features that can impact your listing or earnings
BizBuySell is a marketing platform that enables users to list their business for sale where BizBuySell charges advertising fees. It touts itself as facilitating over 100,000 successful business sales and visited over 1 million times each month by potential business buyers. The site offers listings, franchises for sale, asset sales, business real estate and brokers.
BizQuest helps to connect business brokers and individual sellers with buyers. Users can browse companies by state and top cities, including popular brands. It boasts of helping sell hundreds of thousands of businesses by offering an inventory of companies advertised for sale, a directory of business brokers, and a directory of franchise opportunities.
BusinessesForSale.com over the years has evolved into a service that connects over a million business buyers and business sellers every month. It helps business brokers and private sellers to market their listings for business owners across industries and even franchises.
Exit Adviser is a virtual brokerage platform designed specifically for small businesses. It offers help in the form of online selling tools, sales documents, and support services. Business brokers, advisors, and realtors through the BrokerBoard service can create, upload, and manage their sales listings. It operates through a one-time fee however a free 30-day limited trial is also on offer.
GlobalBX offers a free business for sale listing exchange to facilitate the buying and selling of businesses, commercial properties, and franchises as well as comprehensive business information for business buyers and sellers.
DaltonsBusiness.com is a website for buying or selling businesses and franchises by connecting buyers and sellers of businesses and franchises. Listings of businesses for sales and franchises are categorized based on industry. Through its commercial agents, business owners can directly list their businesses for sale as well.
Franchisegator.com offers franchises for sale listing based on location. With it, you can search for a new franchise based on location, industry and category, the amount required to invest, and top franchises. It also publishes an annual list of franchises in three different categories: Top 100 Franchises, Fastest Growing Franchises, and Top Emerging Franchises.
BusinessMart offers listings for business brokers, businesses and franchises along with resources and small business advice. It has a search feature where you can find a business or franchise based on location and business category. Users who are interested in franchises can search by available capital. It offers users to list their business for sale for one low fee starting at $20.99 per month, no commissions and a promise of confidentiality.
Flippa marketplace platform for digital real estate which lets business owners meet to trade assets that include website domains, blogs, SaaS assets, apps and eCommerce stores and much more. With it, users can manage the sale in this peer-to-peer marketplace or work with a broker from Flippa’s partner network.
A Quick Guide to Business Sales: Four Important Steps
Before offering up your business, you want to get it in the best possible shape to entice buyers. To further improve your chances of success when you are ready to sell a business, you should also know and understand what makes a business attractive to buyers. By knowing their motivation for buying existing or similar businesses, you can more effectively go directly to your target audience. The exercise of business sales can be broken down into just four simple steps:
1. Determine Your Business Valuation: Before listing the sales price of your business you will first need to get a good idea of how much your business is worth. Through valuation, you get a realistic estimate of the business’s worth. You can determine the true value of your business through spreadsheets or other business factors.
You can add up the value of everything the business owns, this includes equipment and inventory, and subtract any debts or liabilities. The value of your business balance sheet can be used as a starting point for determining the business’s worth. You can also determine the worth of your business based on your annual sales or cash-flow analysis. You can also determine how much a typical business in your industry might be worth for a certain level of sales through a given period.
Beyond crunching numbers you can also consider the value of your business based on its geographical location; industry benchmark and analysis; foot traffic; potential synergies with other businesses; and potential strategic value the business might offer.
2. Get Your Financials in Order: understand that your business financials will undergo scrutiny. Buyers will comb through your statements to determine the health of your business and your books above board. You will also be required to provide at least the last three years of tax returns and financial statements that include balance sheet, income statement, cash flow statement.
3. Employ a Business Broker: If you feel selling on your own is a bit overwhelming, you can consider employing a broker. Brokers can help you get the best possible price and sell your business faster than you could do on your own by working on a commission. They can not only help you with your valuation but also offer confidentiality, access to a wider pool of prospects and business experience.
4. Finalize Legal Documents and Contracts: Once you’ve found a buyer and accepted an offer, then you will need to close the deal. At this juncture, you will want to work with your lawyer to handle the legal documents and contracts associated with the business sale.
How much money do you need to sell a small business?
The cost for selling your business might vary based on the amount of work you put into sorting your paperwork, valuation, fees for attorneys, and taxes. If you plan to undertake most of the grunt work you might consider listing websites for better impact. Some websites offer free listings while listing prices for BizBuySell start at $59.95 while business brokers operate through commissions from sales often ranging between 5% to 13%.
What is the best way to successfully sell my small business?
The best way to sell your business is through a broker. By choosing to work with a broker you can outsource the grunt work related to the selling process. Business brokers are experienced in knowing how to market your business. They will help you with the valuation; marketing; due diligence requests and documents that come with selling a business. Business brokers know how to manage this process and provide peace of mind with professional services as well as confidentiality.
What is the best site to list a small business?
BizBuySell.com besides being the internet’s largest business for sale marketplace it offers users options to buy a business or franchise, sell a business, find help with financing and a plethora of resources. Businesses for sale can be searched based on category, state and country and prices. It also comes with a feature to search for a broker in your area.
How do I sell my business fast?
- Prepare a Business Summary: Make sure that you have the proper updated documentation in regards to your title deeds, balance sheets and valuation-related documents for potential investors to reduce their decision-making process:
- Market your business aggressively: use whatever means necessary including ads, listing and business brokers to increase the chances that you come across good prospects.
- Screen buyers: weed out casual buyers and focus on buyers that are qualified.
- Accept an offer: embark on your negotiating process with a price a minimum price in mind and bargain hard.
- Manage the due diligence process: Make sure that your paperwork is up to date including taxes, contracts and deeds.
How do I attract buyers to my business listing?
To gain buyers for your business you will need to channel what buyers are looking for your type of business. This will include:
Having Desirable Products and Services: your business should offer a product or service that not only sells but is also different and better than competing options in the market. ,
Prime Location: Like real estate, your business location can impact its price tag. Often people will pay more for a business that is in attractive locations.
Good Facilities and Equipment: a business with modern facilities and equipment are more attractive than those with run-down and dilapidated facilities. This is will offset costs for new equipment, repairs and overhauls for the buyers.
Strong Customer Base: a business will get attention if it has a large, loyal, and committed customer base.
Good Reputation and Marketing Materials: Branding is key here besides your product and services your brand can tell a lot about how people perceive your business. Having a reputable name will encourage others to buy your business and leverage your good reputation for future success.