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
