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5 Keys to Selling Your Business for What It's Worth
How to market and sell your business with success!
By David Bryant Sound Business Brokers Copyright 2005
YOU OWE IT TO YOURSELF TO DO THIS RIGHT!!!
As a business owner you have made a substantial investment of
your time, talents, money and who knows what else, to feed it,
nurture it, build it and grow it. And now has come the time,
that for whatever reason, you want to sell it to an interested
buyer for a fair and reasonable price - and for the best price
that it can sell for. This business is your baby. It's where
you've spent so much of your energy and effort so it behooves
you to take great care in how you go about selling it to another
interested business owner!
How you go about selling this investment of your life will
greatly impact the quality, experience and return of this
investment. So it makes great sense to do what it takes to do
this right!
Here are 5 important keys to selling your business for what it's
truly worth! And you deserve no less!
KEY #1:
THE IMPORTANCE OF ACCURATE BUSINESS VALUATION...
Many business owners would like to take charge of this process
completely themselves without any input from others as to its
value and worth in the current marketplace. This go it alone
method does work sometimes, however, the odds of the owner
getting the best price from the fairly limited pool of business
buyers that he or she is exposed to is very slim indeed. In many
cases, business owners who decide to sell the business on their
own can make valuation errors - either over-pricing or
under-pricing their business. And as a result can either become
frustrated when it doesn't sell or wonder why the business sold
so quickly as a result from it being under-valued.
These business valuation errors can be avoided most of the time
by having an independent third party take the time and provide
the expertise to help you accurately determine the appropriate
value of your business. If your business is in business to
valuate other businesses then this may not be necessary - as it
is your business to do so. However, if your business is in the
business of repairing vehicles, then it makes good sense to have
a third party valuate your vehicle repair business while your
business repairs vehicles.
If you look back at all the time, energy, money you've invested
in your business, it should be no big surprise that you want to
have the most accurate business valuation possible. As has been
your modus operandi in business, you want your feet firmly
planted in reality. A third party business valuation can provide
this to you.
KEY #2:
THE IMPORTANCE OF CONFIDENTIALITY...
There are many reasons why you would want to sell your business
quietly and confidentially while maximizing its exposure to as
many buyers as possible. Here are a few reasons why this is so
important.
First, existing customers may think there is something wrong
with your business if they hear that you are selling, even
though, there very may well be nothing wrong with your business
at all. Knowledge of its impending sale may just drive them to
your competition which will result in a negative impact on its
value from a sales revenue standpoint.
Second, existing employees may think that their jobs are at risk
and pose a risk and either leave or do less as morale is
impacted. Knowing that the business is up for sale could
negatively impact the stability of your employee base which
would also negatively impact sales revenue and the ultimate
value of your business.
Third, by having a third party confidentially present our
business to others, you can avoid these negative impacts and
maintain the integrity of value that your business deserves.
KEY #3:
THE IMPORTANCE OF FOCUSING ON YOUR OWN SPECIAL TALENTS...
A mechanic repair shop's special talent is the ability to
diagnose a problem, determine the solution and take action to
fix the problem. The repair shop's special talent is not finding
out what the most accurate value of the business is, and selling
to a potential buyer. It could be done, but what will the
quality of this transaction be like? Would that business owner
get the maximum amount that he or she can for the business? Will
taking time away from the special talent of vehicle repair to
determine business value and find a willing buyer, eventually
hurt or negatively impact the day to day ongoing operation and
growth of the business?
These questions must be asked of any owner who is about to
embark on the process of business valuation and sale. By finding
a third party whose specialty is business valuation, marketing
and sales, a business owner can focus on the special talent -
and truly maximize the return on that business investment.
KEY #4:
THE IMPORTANCE OF VALUABLE MARKETING METHODS IN SELLING YOUR
BUSINESS...
As a business owner looking to sell, there are many ways to let
potential buyers you intend to sell. However, most of these ways
are not confidential enough or powerful enough to generate the
maximum number of interested buyers possible. The newspaper may
work, but does it reach the intended buyers and is it as
wide-spread as possible?
Asking a third party to help market your business is one way to
ensure that your business will be exposed to as many buyers as
possible. While you focus on your core competencies a third
party business sales specialist can actively promote your
business confidentially by using media ads, Internet websites,
yellow pages, other business organizations. This gives you the
advantage of finding the best possible buyer and the best
selling price as well. Exposure to the marketplace
confidentially is a major key.
KEY #5:
THE IMPORTANCE OF SUCCESSION...
Have you ever thought who will take over your business on short
notice? Have you ever wondered where you will find the ideal
buyer who will want to take ownership of your precious
investment?
This last key is important because it will give you peace of
mind. Peace of mind that your faithful customers will be taken
care of. Peace of mind that your long time employee
relationships will be preserved. The importance here is more of
an intangible benefit to your own sense of duty and doing what's
right.
In conclusion, much thought and care must go into the sale and
succession of your business if you are going to maximize the
return on this investment and leave with the peace of mind that
you did your best to maximize its potential. Below are some
helpful business resources that may be fruitful in assisting you
in this important endeavor.
To your success!
David Bryant Sound Business Brokers Your source for expertise in
either buying or selling a business.
BUSINESS RESOURCES:
Association of Washington Business www.awb.org
Thurston County Business Resource Center www.thurstonedc.com
Sound Business Brokers www.bizlister.com
Better Business Bureau www.bbb.org
Chamber of Commerce www.thurstonchamber.com
Dunn & Bradstreet www.smallbusiness.dnb.com
Hoovers www.hoovers.com
Laser Monks Office Supply www.lasermonks.com
iBill Business Billing Technology www.ibill.com
ExtendaBiz Business Growth Tactics www.extendabiz.com
Woopidoo! Business Success & Finance Tips www.woopidoo.com
ExactTarget Email Marketing Solutions www.exacttarget.com
SCORE (Service Corps of Retired Executives) www.score.org
SBA (Small Business Administration) www.sba.org
National Business Association www.nationalbusiness.org
National Federation of Independent Businesses www.nfib.com
For further business resources please call Sound Business
Brokers for contact information. Note: Sound Business Brokers is
not liable or responsible for the actions or outcomes that occur
from the providers and resources provided above.
About the author:
David Bryant is a business broker who helps business buyers find
a business and sellers sell a business in Washington State.