The biggest mistakes in selling a business are usually due to a lack of planning or prior knowledge. Sometimes, people assume that they can “just sell a business” and don’t really stop to consider what all that entails. If you aren’t on point in the following areas, you’re not going to get the sale you deserve.
Timing is everything in business, including when it comes time to sell. One of the biggest mistakes that keep business owners from getting the perfect profit from their business sale is because they choose the wrong time to sell. Business has seasons and busy periods. There is something to be said for taking your time to ensure that now really is the best time to sell, based on your financial and circumstantial situations, as well as other factors.
One thing about working with a broker is that there’s never really a “bad time” to sell– and if one actually presents itself, you’ll be the first to know.
Much like any sale, you can’t get far without marketing. Some people will consider this to be a real estate transaction, but it’s so much more than that. Take the time to develop a robust marketing strategy that is focused around reaching out to your audience where they are and giving them the chance to reach back. Social media is a great way to find buyers for your business. You also need to market to people in the right regions and circles because not everyone will be right to own your type of business.
Too often, the biggest flaw is that business owners just don’t advertise, or don’t go beyond putting a sign up on their window or otherwise notifying people in small ways that they are selling. You need to speak up and if you want to get the best deal, you need to let as many people as possible know that your business is on the market.
Pricing is another huge factor to consider when it comes to getting the best sale from your business. Too often, people price things way too low or simply try to circumvent the rules to create a faster transaction or rip somebody off. In business, people want a good deal, but you don’t want to get swindled. On the other hand, you don’t want to overcharge or price your business out of its range. That will scare off buyers, too.
It’s about finding the balance in your pricing and that takes time and an understanding of not only the market, but your business and its value. Consider your profitability and assets, and then sell for a multiple of that based on the overall value– smaller businesses will sell for about 2-3 times their profits while larger companies will list the business at as much as 5-7 times more than the profits and assets.
In order to have a quick sale and keep your professional image, you’ll want to adhere to pricing best practices and remember to follow the rules. Fortunately, with the help of a professional team on your side, it’s easier than ever before.
As mentioned above, having a dedicated broker on your side will often make all the difference in the success of your transaction. It doesn’t matter whether you’re selling your third business or your first. We have the skills and knowledge to make sure that the transaction goes off without a hitch and people get what they need. A broker that has previous success in restaurants, for example, will be a better choice for a fettered diner that needs to be sold sooner than later.