If you’re like me, you trust but verify. Early on in life, we decide if we see the world with a glass is half full or half empty view. It certainly wouldn’t be hard to become jaded doing what I do for a living, but I am still a glass is half full kind of gal until proven otherwise. Everyone has a sixth sense about what is really going on in a situation, you just have to decide to listen to the little voice that is trying to tell you something.

 I have met with so many sellers over the years and I have heard many stories about why they want to sell. Retirement is a favorite among sellers and brokers, sometimes it’s true. If you meet with a seller that’s had his business for 20 years and he’s at least in his sixties, then there’s a good chance that he is being truthful. If he’s 35 and he’s owned the business 5 years, probably not.

 I will tell you that people say all kinds of things but use common sense when deciding if the business is for you or not and try not to get wrapped up in the why unless you see red flags. A good example of a red flag is when a business has transferred multiple times in short periods. 2 years is a common time period for someone to see that it just isn’t profitable. If the business transferred 3 times in 6 years, then that flag is neon red.

 Last year I listed and sold a huge E-Commerce business. When I originally spoke with them they said it was due to a partnership dissolution and I wasn’t sure they were being honest, just because the business was so great and growing every day. It turned out they were being 100% honest, these guys had a fabulous business, but they hated each other and the business was suffering daily. I sold it to a strategic buyer and they kept their respective positions but no longer were forced to communicate directly with each other, a win win.

 Buyers need to balance the information. You should be aware of what is really happening in the business but also at the same time, buying the business for what you can bring to the party. Trust people, but verify the information is accurate so you understand what you’re buying.

Deal with a professional get professional results

Christina Lazuric Woscoff

PH# 949-257-7823 or email us at info@californiabusinessbrokers.com

www.californiabusinessbrokers.biz

                                Buy- Sell your business-California Business Brokers

       11 POINTS TO KEEP IN MIND WHEN SELLING YOUR OWN BUSINESS

1.        Price realistically. Don’t overprice or under price your business. If you price it too high you will scare away qualified buyers. If it’s overpriced, many buyers will not make you an offer for fear of offending you. The longer the business is on the market the greater the chances of your employees, suppliers or customers finding out. Look for comparable sales and price your own business within that range.

2.        Prepare a business offering package. Include the information that buyers need to see; i.e., leases and profit and loss statements. Buyers will lose enthusiasm if they have to wait for items to be produced.

3.        Bring the deferred maintenance up to date prior to putting the business on the market. When buyers see items that need fixing then they often wonder about the condition of things they can’t see.

4.        Prepare a purchase price with your broker prior to finding a buyer. Then you can fill in the blanks when you have a deal. Attorneys are sometimes very slow in putting agreements together and the buyer’s enthusiasm may evaporate if the purchase is delayed.

5.        Look for a buyer in as broad an area as possible. Don’t depend only on you local paper to produce all the leads. Only a fraction of the potential buyers are reading that paper at any particular time. The way to get the optimal price is to have as many qualified buyers as possible.

6.        Qualify the buyers right away. You need to know about their financial strength and business skills before you give out confidential information on your business or spend a lot of time with them.

7.        Make sure your location and equipment leases are transferable before you took for a buyer. Many, many potential sales have blown up because lessors refuse to assign a lease. If your remaining lease term is short, negotiate a new lease prior to offering that business for sale.

8.        Agree on a sales price and terms with the purchaser prior to providing access to your financial records. It is extremely important that the buyer have ample opportunity to examine all aspects of your business and all disclosures are made. These steps are to protect both buyers and sellers and avoid all lawsuits.

9.        Make sure that every agreement of the transacting is clearly stated in writing, including all contingency removals. People quickly forget what was said and not written which frequently leads to arguments and then lawsuits.

10.      Require a substantial deposit when you have reached an agreement with a buyer. The deposit should be held by a neutral escrow holder in order to limit your liability.

11.      If you are financing part of the sale, be sure the correct procedures are followed in order to protect your note. These include filing of a UCC-1 statement with the State of California, suitable promissory notes, security agreements, etc.

                                              Call us today at 800-296-2499 or email us at info@californiabusinessbrokers.biz

                                                                                  

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