SELLING A SMALL BUSINESS QUICK EXIT SYSTEM

Selling a small business has always been hard. Eighty percent of businesses offered for sale will never transfer hands. Many companies don’t sell because there isn’t a systematic approach to finding buyers. Buyers are sophisticated and won’t buy unless all the right components are in place. You must have a systematic approach and a strategy that includes the key components discussed in this article to get offers for your business.

 

Key Components To Sell A Small Business

 

Business can run without the current owner

A company overly reliant on its owner will be difficult to sell. A buyer will be concerned about running the operation if there are no systems in place that can sustain the business. A company must be run by systems and procedures that can continue under the leadership of new ownership.

Have good financial records

A company needs to have good books. At least three years of tax returns and financial statements are recommended. If accounting and record keeping is unsatisfactory, a company will never sell or be sold at a discount.

 

Properly set your asking price

Your business will not sell if the business is not priced correctly. You can look at the latest Bizbuysell Insight Report to estimate what multiple earnings your business should sell for. The newest Insight Report states that the average cash flow multiple is 2.41 to 3.43 times cash flow. 

 

Financial documents available for buyer

It is necessary to have all documents describing the company’s financial condition. Business records should be ready and available for buyers’ due diligence. It is key to be as transparent as possible, as this is where most deals fall apart. Any possible deal will be at great risk if the buyer is surprised by anything not disclosed during normal due diligence.

Financial Records for Due Diligence

Balance Sheet

Profit and Loss Statement

Income Statement

Equipment List

Customer contracts & customer list

Suppliers

Payroll Data

Overview of competitors

 

Create an exit strategy

Selling a small business requires a systematic approach, including how the company will be marketed for sale. The sale should include advertising on multiple business-for-sale websites, social media, database mining, and email marketing. Be creative and consider reaching out to professionals like accountants, lawyers, and industry insiders that could be a source for buyers.

 

 

Tradition Methods to Sell a Business Has Stopped Working

The traditional way of selling businesses has stopped working because buyer expectations have increased and become more demanding, and old methods have failed to keep up with buyer requirements. Information is at buyers’ fingertips, and they are unwilling to wait for long response times from business owners. Proper preparations are necessary to match the demands of the current environment in that companies are sold.

 

Critical Steps to Sell a Business

The other critical components to get a business sold for the best price include: 1) Making your business bankable, 2) Defining the correct buyer profile 3) Systematically screening for buyers. This allows a business to be sold at lower costs with faster results.

 

Help To Sell Your Company

Traditional passive advertising has been replaced with more “Direct Response Techniques.” Direct response techniques only engage people with the desired buyer profile likely to buy the subject company.  We invite you to contact us if you want more information on the best way to sell your business. We provide free preliminary business appraisals so you can make the best decisions regarding the sale of your business. Schedule a Free Call with us to discuss the best strategy to sell your business.

 

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