This article is one of a series that offers insight and guidance into the process of buying selling or valuing a business. Whether you want to buy, sell, or appraise the valuation of a going-concern business, these articles provide specific guidance and references to help you accomplish your goal.
Seize the Moment: Tips for Business Sellers
by Tom West
Those business owners who
decide to take advantage of a favorable market should act quickly
to launch the selling process. There are vital steps to take--and
crucial realizations to face--in preparing for this all-important
1. Resolve current problems as soon and as thoroughly
as possible. If the business is a partnership, both parties should
be agreed about the major decisions to be made in the selling process.
Hopefully, in cases where the business is a partnership, a buy-sell
agreement is firmly in place.
2. Financial records must be accurate, up-to-date,
and impressive indicators of the owner's business ability. Some
buyers may be willing to buy potential, but they don't want to pay
for it. In fact, sellers should be open about all aspects of the
business that might affect the sale; otherwise, once the real facts
are revealed (as they inevitably will be!), the sale may be lost.
3. Sellers must understand from the beginning
that they may have to help finance the sale. The seller's business
broker, in qualifying potential buyers, will also assess their financial
credibility and their ability to run a successful business, thus
helping to take the understandable fear out of seller financing.
4. Sellers should also seek the advice of a business
professional in determining price. The business broker will apply
industry-tested valuation methods, and will incorporate those intangibles
to be ensure that the business will not be underpriced. At the same
time, the business broker will point out to sellers how the price
is dictated by the marketplace and that realistic pricing is an
absolute must. Most buyers, faced with an out-of-sight price won't
wait for it to drop--they'll just go elsewhere.
5. In marketing the business for sale, sellers
benefit many times over from the guidance of a business broker professional.
The business broker who lists the particular business for sale represents
the seller and works toward completing the transaction in a reasonable
amount of time and at a price and terms acceptable to the seller.
The broker will also present and assess offers, and, at the appropriate
juncture, he or she can also help in structuring the sale transaction
itself. The broker and the seller become a team, involved in a relationship
of mutual trust, with the common goal being the successful business
If you have made the decision
to sell your business, the wisest first move is to contact a qualified
business broker professional, who can . . .
- Advise you on pricing and structuring the sale
of your business.
- Prepare the marketing strategy, using professional
- Determine the right buyer for your particular
- Educate buyers in the business-buying process.
- Keep you informed about market reaction.
- Present offers and point out strengths and
When it comes time to sell, one of the best
decisions a business owner can make is to continue managing his
or her business efficiently (and profitably), while depending on
the services of a business broker to forge the steps of the sale.
The business broker professional is an invaluable advisor during
the entire process, offering both objectivity and negotiation skills
honed through years of experience in the buying and selling of businesses.
About the Author
||Mr. Tom West is the editor/publisher of The Business Broker, a monthly newsletter for the business brokerage field. He has written or co-written numerous books including the The Business Reference and Pricing Guide and The Resource Handbook for Business Brokers. He is a founder, past president, and former executive director of the International Business Brokers Association (IBBA). He is a frequent lecturer and seminar leader on all aspects of buying, selling, or appraising a business. Mr. West is probably the most knowledgeable individual in the country today concerning the issues of buying or selling small to mid-sized businesses.
If you're considering buying, selling, or determining the value
of a business, please take a look at some of the excellent books,
reports, and software we have at Business Book Press to help you
achieve success. For example:
The Business Reference and Pricing Guide is the bible of the business brokerage world. If you're a shrewd business buyer or seller, you will want this book to learn what just what the business broker knows. It will pay you big dividends throughout every aspect of the purchase and sale process. Learn more about it...
BizPricer Business Valuation Software is an accurate and inexpensive resource for prospective business buyers and sellers (and business brokers) who want to know the fair market value of a business. No financial expertise or specialized knowledge is needed. Save hundreds to thousands of dollars over hiring an appraiser to provide you with a similar result. Learn more about it...
Preparing A Business for Sale provides business owners with an understanding of the process they need to know to sell their business for the most money. Contains hundreds of little known tips, ideas and strategies to maximize the selling price of a business. Learn more about it...
Strategies for Successfully Buying or Selling a Business is our bestselling book. It has been recommended by Kiplingers Personal Finance Magazine, the BottomLine Personal Newsletter, and has been awarded the Best Business Book of the Year Award from the North American Bookdealers Exchange (NABE). Learn more about it...
Anatomy of a Business Purchase Offer provides you with all of the practical hands-on knowledge you need to make a successful purchase offer to buy a business. The author uses an actual Purchase Offer form to show you exactly what needs to be written and why! He details all of his recommendations in a line-by-line format for each and every aspect of the purchase offer. Learn more about it...
The Business Buyer's How-to Kit: We've assembled a specially-priced Kit with all of the key information you'll need to know to successfully buy a business.
The Business Seller's How-to Kit: We've assembled a specially-priced Kit with all of the key information you'll need to know to successfully sell a business.