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How Could Corona Affect The Sale of Small Businesses?
Are you selling your small business? This post is meant to help you focus as a small business owner on what it means to survive the Coronavirus.
A Guest Blog Post By
Neal Isaacs, CBI, MBA,
Are you selling your small business? This post is meant to help you focus as a small business owner on what it means to survive the Coronavirus.
At the time of the writing of this article, we are on the precipice of something unprecedented. The Corona Virus and COVID-19 have paralyzed the US emotionally and economically. It goes without saying that from a humanitarian perspective this event is devastating as people are sick and dying, but I’m a business broker, not a medical professional. This content is only meant to focus on what it means for small businesses and the owners who depend on them.
Most small business owners are just trying to put together a plan for their businesses to survive what happens when the government imposes mandatory closures and the lack of “business as usual.” But some owners are looking farther into the future. Some were positioning for an exit and some just had offers fall off the table. Let’s explore what this abrupt stagnation could mean for business owners when reviewing this time from the future.
One Time Adjustments:
The important thing to recognize is that we’re all in this together. Every owner and prospective buyer knows that this is a monumental, once-in-a-lifetime economic event. Most buyers have pressed pause on acquisitions for now, and there is uncertainty when it will end at this time, but it’s well documented that it started affecting businesses in March of 2020.
When recasting financials for 2020, most buyers would consider normalizing 2020 by replacing March and similar “Corona infected” months with documented trends from unaffected months. In other words, an argument could be made that a business that normally produces $100K of revenue each month from January to December, which did $25K in March-June of 2020, should be valued as a business that does $1.2M in a year that didn’t experience a pandemic.
While the banks may not consider this financial treatment, a pragmatic buyer could.
A must-watch guide on self-isolation during the Conronavirus pandemic.
Abnormal Expenses:
One thing that’s happening for event businesses and many other scheduled service businesses are cancellations. In these scenarios, business owners are experiencing the double whammy of not only losing the business but paying the credit card processing fees twice; once for the booking and again for the return. A data set could be prepared to show what typical credit card fees are and highlight those merchant charges that were unnecessarily attributed to the pandemic’s activity. Credit goes to Jeff Snell of Enlign Business Brokers for this insight…
A pragmatic buyer would understand that he or she wouldn’t experience these escalated merchant charges in a normal year.
The general rule of recasting is asking if the next owner of the business would experience similar revenues and expenses if they stepped into the owner’s shoes in the normal course of business. Because we’re living through the opposite of a normal course of business, so undoubtedly there may be other adjustments in trying to reconcile the effects of the pandemic.
Another example could be the Cost Of Goods Sold for utilized food or similar perishable products purchased going into the week(s) when all businesses shut down.
The list could go on and on, within reason...
Pivot opportunities
When considering adjustments, however, it goes both ways. Some entrepreneurs will pivot their businesses and make money from the response to this event. Medical distributors, for example, could add ventilators and masks to their pipeline and make a lot of money from this episode.
Savvy buyers will dig into the numbers and discern what revenues are COVID-19 specific and which couldn’t be replicated in the long term. Lack of customer and product concentration are hallmarks of transferable businesses, and owners should move into new markets to fill the gaps but also be mindful of the proportion of the business they are depending on as they grow.
Long Term Outlook
Years from now, we should be able to look back on this time and view it from a long-term perspective. As painful as it is now, the Corona pandemic episode can become another aberration on the trend curve, no different than previous events like SARS and Swine flu. Long-term trends matter and time give perspective. If business owners can pull their businesses through this tough period as we make history, they can re-write it for business buyers in the future to illustrate what could have been without Coronavirus, and at the same time reap the benefits of the rebound.
More about Neal Isaacs
Neil helps entrepreneurs acquire & sell their businesses through his firm VR Business Brokers of the Triangle and writes about the business owner’s journey on his blog at www.RaleighBusinessBroker.com
Neal Isaacs, MBA, CBI is a Business Broker
Certified Business Intermediary who serves business owners in the North Carolina Triangle market with exit planning, business acquisition & sale.
What You Need to Know About Selling a Small Business
Start with this entrepreneur's guide to selling a small business as quickly and efficiently as possible.
Read to exit your business?
Here are great tips you need to know
You're ready to move on to the next venture. Start with this entrepreneur's guide to selling a small business as quickly and efficiently as possible.
Selling a small business
In 2018, there was a 4% increase in businesses sold from the previous year. The 2019 numbers are just coming in and it's clear this has been a banner year for business exits/sales.
The economy has been on a tear and business owners are cashing in on a market with active buyers and high price multiples. But don't believe that just because you have a business, and because you work really hard in that business, that you'll be able to sell your business quickly.
There are steps you need to take when selling a small business, and we want to share with you what they are. Keep reading our guide to learn how to sell your own business.
Figure Out Why You're Selling a Small Business
The first step to selling a small business is being able to clearly articulate why you want to sell. Most potential buyers will ask this question right off the bat.
Most business owners decide to sell for the following reasons:
Bored
Overworked
Retiring
Illness or death
Partner problems
Others decide to sell because their business isn't profitable and their soul has been accordingly crushed after years of slugging it out with nothing to show for it. Selling a struggling business is like trying to sell a rundown house with a crappy foundation and a frat house next door. It's harder to get a favorable transaction done and there are fewer buyers out there interested in dealing with the problems they'd be inheriting in a market with so many attractive deals for sale.
You're better off trying to fix any addressable problems before putting your business on the market if you can take the time to do it.
You Must Know The Real Value When Selling a Company
It's vital you know how much your company is actually worth in the eyes of a potential buyer. This will ensure you don't price it too low or too high.
Find a business broker to get a valuation. The broker will provide you with a detailed explanation of your business's worth based on real market comparable and professional experience.
A formal valuation can also help you back up your asking price. Most buyers will ask for the business to have a valuation done at some point in the process, so better to arm yourself with one before you start engaging prospects.
Prepare Documents
There are certain documents buyer's will need to take a look at regarding your business such as:
Financial statements
Tax returns (dating back three to four years)
List of equipment being sold with the business
A list of contacts of salespeople and suppliers
You should also include any relevant paperwork like your current lease. A buyer must understand exactly what he or she is getting if they choose to buy your business.
Find a Broker
Yes, you can sell a business without a broker but it's like selling a home without a broker. It's often more difficult, riskier, and leaves you vulnerable to making costly mistakes.
Selling your business tends to be a lengthy process. Being patient, taking your time, and being thorough will help you make smarter decisions.
Before choosing a broker, interview several before you choose which one to work with. A good broker will have a realistic approach. A bad broker will try to sell you a fantasy of what you can expect and it'll take longer for your business to sell it at all.
Put Your Business on the Market
Selling a small business doesn't have to be hard. You just need to surround yourself with the right team to help you find the right buyer. Use websites like BizNexus to match you with the right business intermediaries to help you sell your business on optimal terms at the right price.
Best of all, it's a free service. Click here to try it now.
BizNexus -Learn More From Our YouTube Playlist:
BUSINESS ACQUISITION
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THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
3 Practices to Get Your Business Ready for Sale
Are you looking to sell your business? Read through to learn a couple of things you'll need to do to get it ready for the big sale.
Get ready
To sell your business
Are you looking to sell your business? Read through to learn a couple of things you'll need to do to get it ready for the big sale.
Let’s get your business ready to sell
A record number of businesses were sold in 2018. Four percent more businesses were sold that year than in 2017.
Selling a business is a lot like selling a home. It's something you've put a lot of blood, sweat, and effort into, and it takes time to prepare for an exit that makes it all worthwhile.
More often than not, your employees can't come with you once you've sold your business, and that alone can make selling a business rather bittersweet and difficult when it comes to making sure they stay on board with a new owner so you can get through a successful exit.
If you're wondering how to begin to get a business ready to sell, we can help with that. Keep reading to learn our three ways to start the process of selling a business.
1. Get a Business Ready to Sell by Boosting Your Brand
The more brand awareness you have, the more valuable your company is to potential investors. Here's how to boost your company's brand:
Appearance
All your marketing and branding efforts should have a consistent and attractive look to them.
Visibility
Customers and buyers alike should be able to find your company online. Make an effort to get your website ranked first on searches.
Integrity
Clean up any problems your business has going on. That includes any scandals, lawsuits, or scam reports.
Potential buyers want to know you and your business are honest.
Followers
You can't just post every once in a while on social media. You must have an active profile and accumulate followers.
The more customers who are loyal to your brand, the more successful your business becomes. And buyers are purchasing not just your office space and products or services, but your customers as well.
2. It's About Timing and Knowing Your Worth
Get an appraisal done on your business. You'll not only know the real worth of your business but prospective buyers will want one done anyway.
But selling a business is all about timing. While you may think you need to sell because your business has legal challenges, is facing bankruptcy or is losing too much money, you'll also attract buyers eager to cash in on your distress.
It's better to sell when your business is doing well. It's appealing to investors and you walk away with more money in your pocket.
3. Keep Costs Down
The more costs you can cut, the more profits you'll make. And the goal as a seller is to show buyers a revenue trend that's ticking up instead of down.
Take a look at your current expenses and find ways to either reduce them or eliminate them entirely. Often, all it takes is a quick phone call to your vendor to ask for a better deal.
Cutting costs can help show buyers that the business is improving rather than slowing down.
Get Help
Another way to learn how to get a business ready to sell is to partner with the right business broker. We can help match you with the best professionals for you and your unique business when the time comes.
We'll also help explain the process and be there with you every step of the way. Click here to learn more.
BizNexus -Learn More From Our YouTube Playlist:
PREPARING TO EXIT YOUR COMPANY
Have you checked out our podcast?
THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
What's Your Business's Market Value? How to Value a Company
Are you wondering what your business's market value is? Read this article to learn how to value a company fairly so you can sell fast and make a profit.
How to Value a Company
What’s Your Business’s Market Value?
Are you wondering what your business's market value is? Read this article to learn how to value a company fairly so you can sell fast and make a profit.
How to value a company
You’re finally ready to sell the business you’ve worked so hard on. The first step of the process is valuing how much your company is worth.
But if you’re new to selling a business, likely you won’t have a clue where to start. Thankfully, there are several ways to work out the market value of your company.
Ultimately, your business is worth whatever you decide it’s worth. But you can make your estimation using various ways to value the company and can choose a mix that reflects your final thoughts.
Keep reading to learn how to value a company.
Work out the Value of the Assets
If you’re wondering how to value a business, the first thing you should do is add up the value of everything the company owns. This includes all the equipment and inventory. Then, you’ll need to remove any debts or liabilities.
After all, a buyer would need to purchase all the same stuff if they were starting the business from scratch, so the company at the very least is worth the replacement cost.
While this doesn’t provide an efficient whole evaluation of a business, it’s a great starting point for understanding a business’s worth. Your final balance sheet will offer a good indication of the value of your business’s assets.
Remember that the company is probably worth a lot more than its assets though. Consider how much revenue and earnings the company pulls in.
Base It on Revenue
This leads us to another method on how to value a company. You can base the value of a company on its revenue.
How much does the company make in annual sales? Work that out and determine, using a stockbroker or a business broker, how much a company within your niche may be worth for a level of sales. For example, it may typically be worth about three times sales.
Explore Beyond Financial Formulas
It’s important not to just base your assessment of your company’s value on figures. For example, maybe the location of your business is extremely sought-after?
Always consider the value of your business based on other factors too, such as geographical location.
How to Value a Company for New Sellers
When considering how to value a company, these are some of the best methods to start with. However, one of the best ways to assist with the process is to consider professional help.
Here at Biznexus, we can help. We help match business owners with the best business intermediaries to help you sell your company for great value, on optimal terms.
The service is free for business owners, and we aim to help improve entrepreneurs’ chances of having a positive experience of selling their business. To learn more about how we can help, check out our website.
BizNexus -Learn More From Our YouTube Playlist:
PREPARING TO EXIT YOUR COMPANY
Have you checked out our podcast?
THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
Please, Sell My Business! How to Sell a Business You Don't Want
If you're new to the process of selling a business, you may not know the best way to sell your business for maximum profit. Realistically, your business is worth as much as it will sell on the marketplace.
Sell My Business
How to Sell a Business You Don’t Want?
Are you saying "Please, sell my business!"? Read this article to learn how to sell a business you don't want and get the most money possible.
Sell my business
You’ve spent blood, sweat, and tears into building your business and now you’re keen to sell it. As with any sale, your goal is to find the right buyer and to sell your business for maximum value.
But if you’re new to the process of selling a business, you may not know the best way to sell your business for maximum profit. Don’t worry, every new business owner has been there.
If you’re thinking ‘I want to sell my business’ then we’re here to help you. Here are our tips on selling a business to gain the best profit.
Determine What Your Business Is Worth
When selling your business, you first need to determine how much it’s worth before putting it on the market. Realistically, your business is worth as much as it will sell on the marketplace. But deciding on that price can be tricky.
Thankfully, there are various business valuation methods out there to help you. These differ from asset-based to future earnings approaches. However, to get the best results you should use more than one method.
The current market, economic trends, and what other similar companies have sold for recently also need to be considered.
Getting a professional business valuation is a must-do. While legally anyone can conduct a business valuation, a company valuation performed by a professional will be viewed more favorably by potential purchasers. What’s more, potential buyers are likely to request a professional business valuation before committing to purchase so this can save you time later.
Be Clear About What You're Selling
When making a business sale, you need to decide exactly what the assets of the company are and decide what you’re happy to sell. Consider which physical assets you’re selling and what other assets you have available to sell.
Selling a business often includes assets like goodwill, trademarks, client lists, as well as physical assets.
The value of such assets will depend on their quality. If your company is incorporated, you must also consider whether you’re going to sell the business as an asset sale. This is where you sell everything in the corporation, apart from the incorporated company itself.
Alternatively, you can go for a share sale. This is where you sell everything, including your incorporated company.
I Want to Sell My Business: Getting Professional Help
When you’re thinking ‘I want to sell my business, one of the best ways to help with the process is to seek out professional help.
Here at Biznexus, we can help. We help match business owners with the best business intermediaries to help you sell your company for the most profit, on optimal terms. The service is free for business owners, and our goal is to help increase entrepreneurs’ chances of having a positive experience of selling their business. To learn more about how we can help, check out our website.
BizNexus -Learn More From Our YouTube Playlist:
PREPARING TO EXIT YOUR COMPANY
Have you checked out our podcast?
THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
Factors That Influence the Business Valuation Formula
When estimating the value of your company, there are a myriad of key factors that can substantially impact the business valuation formula.
factors That Influence the Business Valuation Formula
To truly gain a profit, though, you must fully understand the value of your business.
When estimating the value of your company, there is a myriad of key factors that can substantially impact the business valuation formula.
Business valuation formula
What if a single error ruined the biggest sale of your life?
Many entrepreneurs work hard every day to turn their business into a success. The ultimate goal is typically to sell their successful business and reap a significant profit.
To truly gain a profit, though, you must fully understand the value of your business. And that means understanding what actually goes into a proper business valuation.
Wondering which factors impact your business valuation? Keep reading to find out!
Room to Grow
When someone buys your business, they are not buying what it currently is. Instead, they are buying what it has the potential to become.
It is important for your business to have growth prospects and opportunities for easy expansion. These help boost your brand in the here and now while showcasing your full potential to prospective buyers, especially if your company is young.
This is why analytics should be at the heart of any growing business. You can have your finger on the pulse of emerging trends and tailor your business to changing demographics and tastes.
Financial Performance
Growth potential is only one part of the valuation formula. Potential buyers are also interested in your past financial performance.
Put simply, it's tough to project future potential if your business has been bleeding money. Conversely, if you've steadily turned a profit for the past 3 years or so, your business will seem like a stable and steady investment.
Ultimately, this is why it makes sense to try to sell your business when it is at its peak performance and you have the financial records to prove it.
The Competition
A buyer inherits more than your future prospects when they buy your business. They also inherit all of your competition.
Make no mistake: buyers want to know what your competitors are like. This includes both the size of the competition and their overall numbers.
For example, if your market segment has a handful of large competitors, that can be a bad sign. It means that a buyer may have an uphill climb against well-funded and well-established competition.
If the segment has mostly smaller competitors, though, this can be a good sign. It means that these smaller businesses will be easier to take on as the business grows.
Business Location
Certain parts of the business valuation formula are set in stone. For example, the business location is just as important as ever.
A business designed for hip, urban millennials may not be a hot seller if you're located in a rural area. And even if the business is a perfect fit for the area, a buyer will pay special attention to rental costs and other overhead expenses.
No matter the business, an affordable location with easy customer access will always be highly valued.
Business Valuation Formula: Your Future Awaits
Now you know the most important aspects of the business valuation formula. But do you know who can help you sell your business?
We specialize in every aspect of business sales. If you want to see how we can electrify your sales chances, try out our BizNexus service today!
BizNexus -Learn More From Our YouTube Playlist:
PREPARING TO EXIT YOUR COMPAN
Have you checked out our podcast?
THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
Embrace Your Entrepreneurial Spirit — Buy or Sell a Business in Boston
Entrepreneurship continues to expand in the post-Great Recession world. Businesses are being bought and sold at a rapid pace. And many entrepreneurs are using dedicated digital platforms to make it happen.
Buy or Sell a Business in Boston?
Embrace your entrepreneurial spirit
Entrepreneurship continues to expand in the post-Great Recession world. Businesses are being bought and sold at a rapid pace. And many entrepreneurs are using dedicated digital platforms to make it happen.
Getting Help with Your Goals
Specifically, entrepreneurs are working with organizations that not only have business listings for sale, but also, help them overcome their hesitancy about buying or selling. Although they have a great deal of confidence, some of these owners still have a nagging fear that things may not turn out as desired.
This can certainly be the case when selling a business. While you may want to move onto something else, you also want to get the best price possible for something in which you invested a significant amount of money and time.
The Science of Selling
While searching for a platform that offers business listings for sale in Boston, MA, you want assurances that the organization will maximize the list of potential buyers for your company. Today, much of this is done through advanced algorithms — the same ones that search engines use to produce the results you want. They use a mix of real data such as online reviews and historical transaction performance over the time you were running your business. Algorithms can also assess your unique website or blog hits as well as your interactions with customers.
Once all this data is compiled, it should result in a list of relevant brokers who can help you find the right business to buy or a buyer for the one you want to sell. This relieves a lot of pressure, so you can focus on the next stage of your life.
That’s what we do at BizNexus. Our goal is to connect you with the right people and maximize your potential to find your next profitable business or sell the one you have for a sizable profit. To learn more, visit us at Biznexus.com.
BizNexus -Learn More From Our YouTube Playlist:
PREPARING TO EXIT YOUR COMPANY
Have you checked out our podcast?
THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
Tips on Selling Your Business With a Business Broker
When the decision to sell a business is final, business sellers often try to go it alone to save themselves the cost of a commission.
Want to Sell Your Business?
Connect with the RIGHT intermediary and leverage their niche expertise
When the decision to sell a business is final, business sellers often try to do it alone to save themselves the cost of a commission (or because they don’t even know what a “business broker” is, which indicates a larger awareness issue in the industry…).
Today, business acquisition & sale markets are awash with high-tech platforms that claim to make selling a business less labor-intensive and stressful. At BizNexus, we don’t allow sellers to post directly on our platform, and we do that because we believe in the value a great intermediary can provide when it comes to vetting, pricing, and negotiating a unique transaction. If you’re a would-be seller thinking of going along, it’s best to understand the resources available to you to help make a successful transaction actually happen before you jump in on your own.
Data and Reviews
We’re big fans of people, -real people who absolutely should be involved in any company sale process. Use reviews to help you build your deal team. Lawyers, business brokers, CPAs…. It’s 2020 people, -if there’s no data on the interweb about a professional you intend to work with there might be something off, so be sure to check with references and verify, verify, verify before you sign any contract. When a business owner has a business for sale, the process can get sticky leading to a potential transaction close, and we strongly recommend having experienced, capable professionals on-call to help you get your transaction over the goal-line.
Finding the Right Marketplace to advertise a Business for sale
There are certain features to consider when it comes to finding the best marketplaces to advertise a business for sale. These include:
Do you have clarity on who potential buyers actually are?
Does the marketplace simply allow you to post a business for sale for a fee? Or is there a professional involved at some point in the process for valuation and listing?
Is there any degree of confidentiality? Can you anonymize your information, location, etc., and still get in front of the right buyers?
An Online Site Based on People & Professionals
When the decision to sell a business is final, we recommend you try to get matched with the best intermediaries for you based on industry, location, deal size, and real-time transaction data. Check out BizNexus, and get matched up with your perfect business intermediary. We’re a platform for active business sellers and business brokerages active in the industry.
BizNexus - A Solution For Busy Entrepreneurs
If you’re busy running the day-to-day of your business, you might not have time to give the selling process the TLC it deserves. It’s a classic situation of not being able to focus on what’s important because you’re buried with everything urgent. BizNexus is a marketplace created for entrepreneurs, and it only takes a few seconds to get matched up with the best business broker for you, so give it a whirl if you want to get the ball rolling on setting yourself up for a great exit.
BizNexus -Learn More From Our YouTube Playlist:
PREPARING TO EXIT YOUR COMPANY
Have you checked out our podcast?
THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
How to Make Your Business for Sale More Attractive to Buyers
Now, more than ever, it's vital to ensure your business for sale is an appealing opportunity for potential buyers by considering these strategies.
How to Make Your Business for Sale More Attractive to Buyers?
Here's how to make your business for sale more attractive to buyers.
Now, more than ever, it's vital to ensure your business for sale is an appealing opportunity for potential buyers by considering these strategies.
Are you finally ready to sell your business?
Whether you started a business in recent years to sell it, or you’ve been attached to it for years, you’ll of course want to sell your company for the biggest profit.
To make your brand more attractive to prospective business buyers, there are several ways to make it more appealing. But where to start?
That’s where we come in to help. Here’s how to make your business for sale more attractive to buyers.
Boost Your Brand
If you’re wondering how to sell a business online, one of the best moves you can make is boosting your brand’s online presence.
Think about it – if you were considering buying a business online, what’s one of the first things you’d do?
You’d go straight to google and search it up, of course. And that’s exactly what your prospective buyers will do too.
Thankfully you get to control what they see. And as you can imagine, the better your brand appears online, the better you’ll be able to sell that brand.
However, if your brand’s online presence needs more work, there are several ways to improve.
At a minimum, your company should have an attractive logo, consistent branding, and a polished website.
Visibility is important too. Does your brand rank highly in Google search? If not, this may put buyers off and it’s worth making efforts to improve your search rankings.
Or perhaps your brand does appear in Google search, but in a negative way? If the first links that appear in the search results include scandalous headlines or scam reports surrounding your brand, then this is an issue.
In such cases, you need to make movements to have these removed. After all, a company that’s attractive to buyers is one that possesses integrity.
Buyers will also check up on a brand’s social media accounts, so make sure your company has these. The activity and following of these accounts are just as important too. Buyers are purchasing your customers, after all, so make sure they can see that you have some.
Promote Your Unique Selling Point
When it comes to selling a business, it’s all about promoting the unique features of your company.
What is your business good at? What makes it special? Whatever the answer, maximize it.
Maybe your company sells a niche product? Or perhaps your brand has a huge following? Or a superstar team?
Usually, a buyer will have one main reason why they’re interested in your business. Sure, there may be lots of features they find attractive but in most cases, there’s one standout quality.
Ready to Put Up Your Business For Sale?
Putting up your business for sale is usually a bittersweet experience. But while it's sad to bid farewell to a company you’ve spent so much time and work on, there’s the sweetness too. And that’s the profit you can make from it!
To truly reap the benefits of this sweetness, you’ll want to make your business as attractive as possible to buyers so you can sell it for the greatest profit.
So, remember to know your worth and take the time and effort to improve your brand’s online presence. You should also promote your selling point as much as you can.
We promise it will be worth it.
If you need help retailing your business, we can help you sell for the highest price. Learn how here.
BizNexus -Learn More From Our YouTube Playlist:
PREPARING TO EXIT YOUR COMPANY
Have you checked out our podcast?
THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
5 Best Practices For Preparing Your Business For Sale
Are you ready to put your business up for sale? Here are some best practices we recommend you use to properly prepare your business for the sale.
Preparing Your Business For Sale?
Here are five best practices you don’t want to miss out.
Are you ready to put your business up for sale? Here are some best practices we recommend you use to properly prepare your business for the sale.
Business for sale
When you have a business for sale, you need to be certain that you are leaving no stone unturned when it comes to the details.
In addition to figuring out exactly why you want to sell, you'll need to cover your legal bases and come up with a strategy that works. This will help you fetch the biggest price, while also getting help with negotiating the deal.
Follow these tips so you can prepare your business for sale.
1. Get a Thorough and Up to Date Valuation
For starters, you'll need to get a proper business valuation. During a valuation, professionals that understand the market will take an objective look at your company to see how much it is worth.
They will look into all matters of the business, including your cash flow, debt, future growth potential, and other variables.
When your business has been valued, you will know what kind of sell price the market dictates and how much you can stand to earn. Having this report will also give you leverage and clarity when you're speaking to buyers.
Start to put together documentation for your business well in advance so that you can show clean, accurate records of your revenue, budgets, and other important matters.
2. Understand Completely Why You Want to Sell
Aside from financial implications, you need to know exactly why you intend to sell the business.
For some, it may simply be time for retirement, and selling the company can give you plenty of liquidity. You may also be at a point where cutting your losses and selling a majority of your company in an acquisition might make good sense.
Your reason for selling will help you choose which strategy can work best for you.
3. Carefully Vet Your Prospective Buyers
In addition to the sales price, you need to know who you're selling the company to.
Work with a business broker so that you can research every buyer's background. Finding a broker is crucial because studies show that only 20 to 30 percent of companies ever even find a buyer.
When you are seeking a buyer, move as carefully as possible so that your company lands in good hands, and at a good price.
4. Have a Plan in Place For the Transition
You need to have a solid exit strategy in place so that you can comfortably transition ownership and management.
When you have a plan, you're better able to choose a successor and make sure the company is in good hands once the sale goes through. It will protect the brand moving forward, and any future equity you might retain in the company.
5. Get Some Marketing Help
Your first two priorities should be to get legal help to know exactly where you stand and making a point to stay silent on it until the time is right for you to share terms with the public.
Once you are ready to announce to the public, make sure that you have a marketing team in place to help you communicate your message.
Follow the Right Tips When You Have a Business For Sale
When you have a business for sale, these are the tips that you need to keep in mind. It will help you get the best deal while protecting your interests.
Get in touch to set up a free consultation for our business sale and acquisition advice.
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PREPARING TO EXIT YOUR COMPANY
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THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
How to Choose a Business Broker to Sell Your Business
Do you think the time has come to sell your business? If you believe that is the right move, you will need a reliable business broker. They are not easy to find nowadays, so take a look at some tips that will assist you in choosing the right agent for the sale.
Finding a Business Broker is Easy
Pick the most qualified is hard. Here is how to choose a business broker to sell your business
Do you think the time has come to sell your business?
If you believe that is the right move, you will need a reliable business broker. They are not easy to find nowadays, so take a look at some tips that will assist you in choosing the right agent for the sale.
Make Sure They Are Qualified
The first thing you want to ensure is that you will be doing business with someone who has the necessary skills. That means you need a broker who has the necessary licenses and qualifications.
Additionally, you may ask them whether they belong to an association or another professional organization in their niche.
Ask About Their Experience
It is not only about selling your company but also about putting it in the right hands. That is why you need an experienced broker with plenty of archived transactions.
Feel free to ask them about their experience across various industries. It is always wise to ask about the details of the latest transactions. Ask them how long it took them to close the deal, and whether you can talk to their past clients as a reference.
Ask Them About Selling Strategies
When meeting with the broker, they should tell you more about how they do things. That includes the strategies they use to advertise your business. It may include placing online advertisements on website marketplaces, as well as sharing on social media, or using contacts to find a potential buyer.
The best brokers out there mix all of these methods to find someone to purchase your business quickly. Additionally, they will make sure to screen the interested parties, and only meet you with serious buyers.
No Upfront Payments
When choosing a broker, you should be wary of those that are looking for upfront payments. The way agents do business these days is that they take a fee from the successful sale. You shouldn’t pay anything upfront as there is no guarantee that they can close the deal.
It is also wise to agree on the fee before you start the selling process. We understand that you want to save as much money as possible, which is why you may not go for the broker that asks the highest fee. However, pay attention to small charges, too.
Brokers often lower the price when they have too many companies to sell, and they don’t genuinely care whether they will successfully sell your business.
Agree on the Selling Price
A broker can tell you an estimated price based on his experience and skills. However, you should do your research regarding different valuation techniques. You can even try to find a business with similar characteristics to yours and see its selling price. That will be an excellent indicator of the cost you should go for when putting your company up for sale.
The important thing is to ensure that the broker will honor the deal. You may agree on the lowest and highest acceptable prices so that they have wiggling room. However, it is mandatory to specify that they won’t go below the lowest cost only to finalize the sale.
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THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
5 Ways on How to Exit/Sell Your Business Quickly
Here are some of the ways how you can exit your business smoothly, but make sure to leave the company in safe hands. Make sure that the business is profitable as it is easier to sell a company that guarantees a steady profit.
Sell Your Business Quickly
Here are 5 ways to sell or exit your business quickly
Exit or Sell Your Business Quickly
You had a good run with your company and plenty of success. However, it seems that you are not ready to stick around anymore. Here are some of the ways how you can exit your business smoothly, but make sure to leave the company in safe hands.
Find an Interested Buyer
If you set your mind on selling the company, you should start looking for interested buyers. Keep in mind that this process may require a bit of time and patience.
Here are some things that you can do to prepare your company for sale:
Make sure that the business is profitable as it is easier to sell a company that guarantees a steady profit.
Call your accountant and review the finances. Make sure that there are no issues, and everything is clean.
Prepare a report with revenues and expenses over the last year. You can even go and prepare a financial projection for the upcoming period.
You can put up your business for sale in an online marketplace, or spread the word among the people you know in your industry. Depending on the attractiveness of your company, interested buyers should appear soon.
Offer the Business to Existing Staff
An alternative way of selling the company can be offering it to the existing staff. You may have managers, accountants, and other people working for you.
Ask them if they would be interested in taking over the business full-time because you want to exit. If they have the necessary resources and desire to buy you out, they will respond positively to your offer. That is a great way of selling the company, but ensuring that it is in the hands of someone who knows it inside and out.
Pass the Company to a Family Member or a Friend
If you think it is time for the next chapter in your career, how about offering the current company to a family member or friend? Find someone in your surroundings who is capable of doing a good job and maintaining a profitable business. If you believe they are the right choice, go ahead and pass the company to them, or hire them as CEOs while you remain the owner formally.
Find a Business Partner
If you can’t find a buyer to purchase your business, how about finding a partner? That may mean you won’t exit the company completely, but the partner may take over the areas you don’t want to handle anymore.
That is a great way to remain in the business while finding a new dose of motivation. Who knows, that may be the boost you need to take the company to the next level.
Initial Public Offering
While this may be an enticing option, keep in mind your company needs to be attractive enough for the public. Believe it or not, less than 0.01% of US companies are public. If you estimate that this can be the right move, it may be an excellent way to earn a lot of money.
Liquidation and Bankruptcy
Finally, you can also go with liquidation or bankruptcy. However, keep in mind that this means you will not only exit, but also close the business. That is why it is important to assess all your options and use this one as a final resort.
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Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
Best Practices for Getting Your Business Ready for Sale
There are many reasons why people sell businesses, from cutting your losses to cashing out and growing your wealth. Whatever your reason is, you'll need to understand the art and science of getting your business ready for sale.
Selling Your Business?
Best Practices for Getting Your Business Ready for Sale
Use this guide to help you in getting your business ready for sale.
There are many reasons why people sell businesses, from cutting your losses to cashing out and growing your wealth. Whatever your reason is, you'll need to understand the art and science of getting your business ready for sale.
Having an up-to-date valuation for your business is essential if you're planning to make a sale.
Getting your business ready for sale requires a diligent, scientific approach.
Learning how to sell a business includes making sure you're handling everything on the legal front while also maximizing your profits in the sale.
Not sure you're quite ready? No problem! Keep reading for seven tips that will have you feeling like a pro in no time.
1. Get a Professional Valuation For Your Business
Having an up-to-date valuation for your business is essential if you're planning to make a sale.
During a business valuation, a credible third party will break down everything from your marketplace value, cash flow potential, and how much you can expect to make in a sale, to an in-depth look into your strengths and weaknesses.
Accountants or investment bankers will make your valuation as accurate as possible.
2. Shore Up Any Red Flags and Make Improvements
The last thing you'd want is to give a prospective buyer any reason to balk at buying your business. Be sure that you audit your business for any red flags before moving forward with the sale.
This means getting rid of any liens or tax issues, and ensuring that ownership is crystal clear. Settle any outstanding balances and legal issues so that they don't bleed into the sale.
3. Be Clear on Your Intentions For Selling and What You Hope to Gain
Everyone has different reasons for selling their business. Never move forward with the process unless you're clear on your intentions and goals.
For instance, you might sell the business to retire, dissolve the business during a dispute, or get an influx of cash flow. When you know your goals on the front end, you'll be able to get the results you're looking for.
4. Analyze and Clean Up Your Books
Without question, your books need to be in order if you're going to sell your business.
If you don't have clear financial records, no credible buyer will take the chance of purchasing your company. You'll need to have up-to-date books from the past three years, in addition to tax records.
Piece together your reports and have copies available to buyers.
5. Put Together a Financial and Legal Team to Facilitate the Sale
In order to get the best from your business sale, you'll need the backing of financial and legal professionals every step of the way.
Make sure that they specialize in mergers and acquisitions, and that you use M&A analytics tools for due diligence. In the meantime, ensure that you're staying on top of your business matters so that your company doesn't falter while you wait for the sale.
Follow These Tips When Getting Your Business Ready For Sale
Getting your business ready for sale requires a diligent, scientific approach.
Using the strategies listed above will help get the end result you desire.
Looking for more professional help? Reach out to learn more about how to get your business ready for sale on your terms.
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Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
Mistakes to Avoid When Selling Your Business
Are you selling your business? If so, make sure you avoid the mistakes listed here to ensure a successful and profitable transaction.
Mistakes to Avoid When Selling Your Business
To ensure a successful transaction
Are you selling your business? If so, make sure you avoid the mistakes listed here to ensure a successful and profitable transaction.
Selling your business?
In 2018 there were 30.2 million small businesses in America. In 2015 small businesses employed 47.5% of the private workforce in the U.S.
But there comes a time in every entrepreneur's life when they are ready to move on and sell their business. While the reasons for selling your business may vary, the goal is to walk away with a tidy profit.
You have to know what you're doing to ensure you sell your business for the most money. And there are tons of mistakes you can make.
If you're looking to sell your business, keep reading. We're sharing with you the biggest mistakes entrepreneurs make when selling a company.
Always Be Prepared Before Selling Your Business
Just like a well-thought-out business plan can help you grow your business, you need to do the same with your exit strategy. It's hard to get exactly what you want when you don't know what that is.
Collect Your Documentation
You'll need to gather a few key pieces of information in order to sell your business successfully such as:
Sustainable profitability projections
Identify and address lease issues
Identify and address staffing problems
No one wants to buy a business that isn't well run and well organized. This information will also help you set the price for your business that's on par with the current marketplace.
Plan Ahead and Start the Process Early
If you really want to be prepared to sell your business, begin the preparation process at least two years before you list it for sale.
Qualify Your Buyers
Another common mistake is not properly pre-qualifying prospective buyers. While you may think that qualifying a buyer too soon will scare them off, usually the opposite is true.
Instead, the pre-qualification process helps draw those buyers deeper into the sale. If you're worried about giving buyers access to sensitive information, have them sign documents such as a confidentiality agreement and financial background information.
This process will help you attract only serious buyers which means you won't waste your time wooing the wrong buyers.
Hire the Right Team
While it may seem like a good idea to try to save some money when selling your business by not hiring professional help, it's usually not. There's just too much at stake.
An investment broker and/or business broker can help you present your company in the best light.
How a Broker Can Help
They know exactly which databases to advertise your business on. They also know how to do the following tasks:
Preparing documents
Identifying buyers
Generating interest
Soliciting offers
They'll also help close the deal as quickly as possible.
How Other Professionals Can Help
But you may also want a transactional attorney to help with the following tasks:
Preparing an asset purchase agreement
Negotiating an asset purchase agreement
Handling documentation such as bills of sale and officer certificates
An accountant can help you structure your deal and help you plan ahead of potential taxes you'll have to pay. And a business appraiser can help you evaluate your business so you know what it's really worth.
Work With Us
Selling a company is a difficult process. It's important to surround yourself with the right team to help you save time, money, and prevent potential problems from arising.
We can help. Our team of knowledgeable experts can help make selling your business easy. Click here to learn how.
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Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
Preparing Your Business for Sale: 6 Tips to Attract the Best Buyers and Make a Great First Impression
While there are entrepreneurs that stick to a particular business till retirement, there are several others that sell their businesses at one point and go after other ventures. Whatever your reason for deciding to sell a business, it is important that you attract the best buyers and make a great first impression.
Attract The Best Business Buyer
Here are 6 tips to prepare your business for sale
While there are entrepreneurs that stick to a particular business till retirement, there are several others that sell their businesses at one point and go after other ventures. Whatever your reason for deciding to sell a business, it is important that you attract the best buyers and make a great first impression. Wondering how to make that happen? We will discuss six tips that can help you make the best out of your exit from your business:
Prepare Your Key Employees for the Move
One of the first things to do to ensure that you sell your business smoothly is to give incentives to your key employees and prepare them for the imminent change. They can create a serious conflict of interest when you go about trying to sell the business behind their backs. Consult with them early and make sure they are part of the process.
Put yourself in the Potential Buyer’s Shoes
One of the ways to attract the right buyers for your business is to put yourself in their position. Doing this will help you to make some changes that help you and the potential buyer. Furthermore, you can identify areas to improve on and make a great first impression.
Get Help in Areas You Need It
It is unlikely that you currently understand everything about selling a business. Even if you have completed similar deals in the past, it can always be helpful to get external help. Some business brokers in your area who understand your industry can provide insights and help you reach out to genuine potential buyers.
Interested to sell a business
Get Your Numbers into Shape
One aspect of your business that needs to be super perfect before you make contact with any potential buyers is your financials. Your financial statements will generally determine the value of your company. The way they are prepared and presented will give your potential buyers an idea about how your business is running. When they are less credible, Potential buyers will be discouraged. It may be necessary to have your financial statements audited or, at least, have them reviewed by a reputable accounting firm.
Create a Growth Plan for the Business
Though you are ready to exit the business, there is nothing wrong with having a growth plan for it. In fact, it can help you attract the right buyers and make a great first impression. Make a viable plan that shows that the business you are trying to sell has opportunities ahead of it. If you can credibly show three years of meaningful growth, most buyers will be impressed.
Plan Your Information and Sales Package
There is some very important information you will need to successfully convince your potential buyers to take up ownership of your business. Your marketing materials will need to be unique and it is helpful having a business broker by your side to help you through the process. Plan ahead and prepare an information and sales package that will convince the right buyer.
Selling a business is an act you should never take for granted. You need to approach it the right way in order to get the business well prepared and attractive. The six tips discussed above will also help you make a great impression when the right potential buyers come knocking.
Are you preparing your business for sale? Log in today at BizNexus. Our trusted experts are always available to guide you through the entire process and ensure that you get the best buyer for your business. An amazing experience awaits you.
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Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
The Best Exit Strategies for Your Business
Is it coming to the time when you can no longer run your business? It's important to have exit strategies planned. Whether you're looking to retire, get out of an industry, split with partners or just don't want to run your business anymore, proper exit strategies are a must. Getting the help of a business mediator can be an incredible value-add if you're looking to exit a business where that may get sticky with existing partners.
Top 4 Tips To Exit Your Business
Best exit strategies for your business
Is it coming to the time when you can no longer run your business? It's important to have exit strategies planned. Whether you're looking to retire, get out of an industry, split with partners or just don't want to run your business anymore, proper exit strategies are a must. Getting the help of a business mediator can be an incredible value-add if you're looking to exit a business where that may get sticky with existing partners.
Subsequent comprehensive studies can cost you upwards of $35,000 depending on the size of your business and what type of player you intend to sell your business to (private equity or family office, for example). Consider How You're Going to Sell, Transfer, or Liquidate the Business and your Ownership Interest. Many people seek exit strategies not just to get rid of a business, but to start a new professional and personal lifestyle.
Exit strategies are absolutely necessary when you're making a transition with any business.
By finding the strategy to help you in this regard, you'll create a clean transition that is beneficial for whatever your step is. Let's take a look at a few strategies that'll help you out.
1. Explore Mediation if You Have Partners and Want Out
Getting the help of a business mediator can be an incredible value-add if you're looking to exit a business where that may get sticky with existing partners.
They'll work with you and the other parties in your business to be sure that you're able to leave the company and dissolve your ownership in a way that works. This can include facilitating settlements, scheduling meetings, and conference calls, and helping to maintain privacy and cooperating during mergers and acquisitions.
By touching base with some third-party mediators, you'll be able to engineer the best agreement for your company's needs.
2. Have Your Business Properly Valued
There are an exponential number of candidates out there who could be ready and willing to buy your business if you can produce accurate historical and financial information.
You'll need to get a proper valuation as a first step towards this to know where your company stands and how you can ensure a positive return on your investment come selling time.
A proper preliminary analysis of your business should cost you between $3,000 and $10,000 in most cases. Subsequent comprehensive studies can cost you upwards of $35,000 depending on the size of your business and what type of player you intend to sell your business to (private equity or family office, for example).
By starting with this type of professional analysis, you'll learn how much your company is worth, what sort of sales price you can expect in today's marketplace, what strengths and weaknesses your business currently has, and so much more.
3. Consider How You're Going to Sell, Transfer, or Liquidate the Business and your Ownership Interest.
What's the end result you're shooting for?
When you can answer this, you can reverse engineer and decide your best course of action to take today to start moving towards that.
For instance, if you are just trying to cut your losses and get a nice check for your troubles, selling out might be best. If this is more of retirement and you'd like to pass the business on to your family, it'll involve facilitating a transfer.
If your business has a lot of assets, liquidation could be best.
Get the advice that'll steer you in the right direction. Above all, be sure you know what your next "pivot" is.
Many people seek exit strategies not just to get rid of a business, but to start a new professional and personal lifestyle. It's easier to get through to the other side when you are honest about what you want next.
4. Get the Help of a Business Lawyer
Finally, you'll always need another set of eyes for the legal end of things.
This way, you're able to protect the sale or transfer and can weigh every potential downstream implication of negotiating points as they come. Research some business attorneys early in the process so you can get the assistance you require.
Consider These Exit Strategies
Exit strategies are absolutely necessary when you're making a transition with any business. Use these four tips and you'll be taken care of.
If you're looking to sell your business or explore other options, let these points guide you.
3 Tips on How Not to Sell Your Small Business
For an entrepreneur thinking about selling their business, it’s important to know the reasons why it’s sellable, and more importantly why it is not. Just recently, SCORE identified 3 main reasons on how not to sell your business:
3 TIPS ON HOW NOT TO SELL YOUR SMALL BUSINESS
Successful planning will have you laughing all the way to the bank.
If you are going to sell your business, here are three tips on how not to sell your business. Successful planning when selling a business can have you laughing all the way to the bank.
For an entrepreneur thinking about selling their business, it’s important to know the reasons why it’s sellable, and more importantly why it is not. Just recently, SCORE identified 3 main reasons on how not to sell your business:
First reason why not to sell your business
Don’t sell your business if you still love what you’re doing: If you still love your work and feel fulfilled every day, there isn’t a reason to step away from your business. Generally, business owners should look to sell because they want to make a lifestyle or professional change.
Second reason why not to sell your business
Don’t sell when the market is in a downturn: The value of your business is correlated to the market within which it operates – therefore, you should look to sell when business is good, not bad. There’s a caveat to not selling during a downtown-- the downturn must be temporary. If you anticipate growth in the future, hold for the rebound.
Third reason why not to sell your business
Don’t sell to the wrong person: Not all buyers are created equal. If you care about the long-term success of your business after the sale, you should do your due diligence for any potential buyer.
Make sure you’re selling for the right reasons if you really want to exit your business.
With the recent upward economic trend and low interest rates, many small businesses are now attracting interest from potential buyers. In fact, BizBuySell Insight Report found that a record number of small businesses were sold in 2018 for the third straight year.
Buying a business is one of the best ways for companies to enter a new market or increase market share.
The best way to determine your business's actual worth is to hire a third-party accountant or business broker to conduct a business valuation. A business valuation typically starts by assessing the value of your company's current and long-term assets, income statements and receivables, short-term and long-term liabilities, and other metrics that show the financial health of your business.
If you are in the market to sell your business, you need to sell it for the right reasons and at the right time. Otherwise you will be seeing someone else laughing to the bank and it will not be you.
What to Do before Selling Your SaaS Business
Are you thinking of selling your software as a service (SaaS) business? Remember, buyers most often buy SaaS businesses for financial or tactical reasons. Know what they want in an acquisition, and you will be in a better position to undergo the entire process without much difficulty.
Are you thinking of selling your software as a service (SaaS) business? Remember, buyers most often buy SaaS businesses for financial or tactical reasons. Know what they want in an acquisition, and you will be in a better position to undergo the entire process without much difficulty.
Establish the Value of Your SaaS Business
It doesn’t matter if you are selling a SaaS business or a website; you need to find out the best price to sell your business. To know what you may receive in the market, you need to get a valuation of your SaaS business to be aware of what it’s worth. After that, start setting up your company’s prospectus, including the facts, figures, and numbers. Typically, this is done by computing the annual revenue generated by your SaaS business and doubling up that amount. Also, factor in the amount you’ll compensate the broker or marketplace you use to sell your SaaS business.
Put Your Books in Order
Recurring proceeds is one of the highest draws to a SaaS business. Nevertheless, in terms of increasing revenue generation, a growing business doesn’t guarantee that buyers will pounce on your deal. Potential buyers are often not much intrigued by ‘what meets the eye’. Meaning, they would be more interested in finding out the fraction of your actually profitable earnings. For this reason, you need to compute costs, such as costs of acquiring customers, your rate of churn, your average growth rate, and more.
To put your books in order, you need to think about maximizing profits and minimizing expenses. Usually, it’s less costly to retain, serve, get existing clients to subscribe and renew than trying to attract new customers to swap the cash flow. Additionally, upgrade your systems time and again to help you lessen cancellations. One thoughtful way of minimizing costs is cutting down human assistance. Use tutorials, videos, and knowledge bases to reduce the need for interaction between humans.
Debug Your Source Code
It doesn’t matter your finances are in good shape. If your source code is disordered, jumbled up, or missing in documentation, potential buyers will be a bit skeptical about your business. In essence, your SaaS business source code ought to be clean, annotated, tested, and verified. It can be overwhelmingly difficult to sell your SaaS business if the source code doesn’t comply with the set standards and guidelines.
As well, a non-reliable, non-concise, overly complicated code can present you challenges as far as selling SaaS businesses is concerned. Being the business proprietor, you need to be familiar with all the entries and exits of your source code. For a reason, it will present fewer challenges to the buyer; in case they want to alter or upgrade the software. Aside from that, a well-documented source code lets the seller take over your business naturally.
Assess if You Need External Assistance to Sell Your SaaS Business
Note that, a reliable online business broker can help you get a valuation of your SaaS business. This is necessary so you are clear about what your business is worth. The good thing, you won’t need to meet your preferred business broker physically. Schedule time to chat with a reliable online business broker (website to advertise) to identify appropriate buyers. Of course, you need to have completed the valuation and prospectus before you start looking for buyers.
An extensively experienced online business broker can help you prepare and move you through the entire process of selling your SaaS company. More importantly, letting an expert online business broker negotiate the price with prospective customers on your behalf removes you from the equation. As a result, it eases the discomfort you might have when it comes to the actual transaction.
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THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
Top 3 questions to ask a business broker in 2019 to sell a business
Business owners often make huge mistakes by attempting to sell their business on their own when not prepared to do so. What’s worse? Choosing the wrong business broker to sell your business because you weren’t prepped to ask her the right questions. Here are our top three questions to ask a business broker before selling your business in 2019:
Business owners often make huge mistakes by attempting to sell their business on their own when not prepared to do so. What’s worse? Choosing the wrong business broker to sell your business because you weren’t prepped to ask her the right questions. Here are our top three questions to ask a business broker before selling your business in 2019:
1) How many businesses have you sold as a lead broker on the sale?
Resumes mean little, completed transactions mean everything. Get a list of completed transactions the broker has led in your industry, in your area, in your approximate deal size… everything.
2) Who is my potential target buyer?
Make sure the broker has a good plan for selling your business, and a reliable list of active buyers she plans to market the business too. Will she market individual buyers? Investment groups? Strategic competitors in your industry who might be actively looking for acquisitions?
3) Do you co-broker?
This is a big one business owners often miss when hiring a business broker. If a business broker will not agree to co-broker you might want to run for the proverbial hills as a potential seller looking to maximize interest and offers within a limited amount of time. A broker who refuses to co-broker (work with and share commission) with another professional representing a buyer who might be interested in your business is essentially limiting your selling opportunities in order to protect their own commission. We believe business brokers have a clear fiduciary responsibility to maximize interest, offers, and speed on behalf of their seller clients, to ensure the highest price and best terms for any business owner who has entrusted them to sell their business.
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BUSINESS ACQUISITION
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Large Majority of Small Business Owners Completely Unprepared to Sell a Business in 2019
A recent article in Globe & Mail details the fact that the majority of small business owners who are ready to sell their businesses in 2019 are completely unprepared to do so. With SO many other business owners out there planning to close up shop and sell their businesses for a nice exit in a baby-boomer filled market, the statistics are mind-boggling considering we’re talking about the transaction of a lifetime, -literally. The author, Matthew Halliday states:
A recent article in Globe & Mail details the fact that the majority of small business owners who are ready to sell their businesses in 2019 are completely unprepared to do so. With SO many other business owners out there planning to close up shop and sell their businesses for a nice exit in a baby-boomer-filled market, the statistics are mind-boggling considering we’re talking about the transaction of a lifetime, -literally. The author, Matthew Halliday states:
““Between 2012 and 2018, the number of businesses who just planned to close outright, rather than sell, tripled, from five per cent to 15 per cent,” says Corinne Pohlmann, senior vice-president of national affairs at CFIB. “What worries us is that they’re not finding buyers, and then their only option may be to shut down.”
Additionally, most entrepreneurs tend to put their businesses on the market long before they are ready – for example, without first bolstering lacklustre financial statements or securing relationships with long-time clients in writing. Few have formal succession plans, Ms. Pohlmann says, and many also tend to let their revenue slip in the years before a sale.
So, in that field of under-prepared businesses, it can be easier to stand out if an entrepreneur has the patience to proceed with the months – or years – of preparation needed beforehand.
The article emphasizes the importance of building the right team FAR in advance of the moment you’re actually hoping to sell. Preparation is key here…. If you do your research in advance and start identifying buyers early on in the process, you stand a MUCH better chance of being able to play multiple bids against each other when the time comes to sell.
Takeaway lesson? Put together your business exit dream team early on in the process, and let them keep the ball rolling and keep you from getting distracted with the day-to-day operations of your business.
To get matched with intermediaries that fit your geography, business, deal size, and more, head over to BizNexus and get your top three suggested intermediaries today, for free.
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Preparing to Exit a Business
Have you checked out our podcast?
THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.