Selling a business may be a learning experience for business owners. If you haven't bought or sold a business in the past, you will gain new expertise when you do.
Tips for a positive selling experience.
You may have imagined selling your business to a certain kind of buyer. Sellers often hope a child or family member will take over their business. Some business owners imagine their employees will want the business. Others imagine their business will become part of a large company they admire.
What you want your legacy to be
Either way, don’t delay, if you are contemplating selling your business start organizing your information (cleaning up financials books, getting appraisals, and locating leases, deeds, and titles) about a year before your desired sale.
Business owners can prepare for a valuation of their business by getting their books in order and getting appraisals of their assets. Many other factors influence a valuation, but the preparation of these basics will make the process go smoother.
Here are some examples of buyers and sellers under pressure. A fair price is not their only priority.
A driver half-way to their destination runs out of gas. The driver has to buy gas. The gas buyer will overpay for gas if they have to. We've all encountered this in isolated areas on road trips. The seller has leverage.
The owner of that remote gas station needs to sell their business quickly because their spouse got a job in another state, and they have to move within months. The buyer may not have time to wait for a fair market value offer. They may accept a below fair market value offer. In this case, a buyer has leverage.
Fair market value is possible in a deal where neither buyer nor seller is under pressure to make a deal. They can buy and sell or walk away.