Q&a: Can I Sell My Business On My Own?
Selling on your own versus using a broker
You can sell your business on your own. That is your choice, but we advise against doing so. Why? Because a Business Broker will bring efficiencies to the process and save you a lot of energy and potential frustration in managing the sale, from finding Buyers to documentation and negotiations.
There is also a lot of time and expense involved in the process. Perhaps the greatest expense of all is wasting time with unqualified Buyers. A Broker is a trained professional and will not only manage the process, but he or she will also qualify and manage potential Buyers.
If you are dealing with a number of unqualified Buyers, you most likely will end up selling your business for a price far less than it is worth in the market. A Broker will assist you in properly pricing your business by valuing your business within the context of current market trends, comparable businesses and industry conditions. A Broker can ensure more often than not that you get that price in the market.
Finally, there is the issue of confidentiality. Owners selling directly to Buyers often find that maintaining confidentiality is very difficult. For many Buyers and Sellers, this is an important piece of the puzzle.
Preparing for the sale
To get ready for a sale, the main issue is gathering current financial information. If you use an accountant, he or she should be able to provide the most recent financial information about your company. An attorney might also be helpful, provided you choose one that is familiar with the business closing process and the laws of your particular state. Organizing business documentation, financial information and licenses required to run the business are crucial to an efficient sale.
Financing the sale
A. That decision is up to you, but that approach is most common. In many cases, a transaction will have some piece of the sale financed by the Owner, which the Buyer typically pays from future business revenues. Although banks have been more willing to offer financing for these types of transactions, there has been reluctance in the past because banks don't have a lot of control over the success (or failure) of the business, particularly with a new owner at the helm. Seller financing also demonstrates confidence that the business is viable and will, most likely, be a success going forward.
Also, the Seller's offering some financing, as opposed to an all cash purchase, has been shown to help in receiving your asking price. In other words, an all cash purchase typically undermines your asking price. Evidence has been shown also that businesses listed for all cash either take much longer to sell or don't sell at all. Financing is not a bad thing. In fact, with reasonable terms, financing the sale may increase the chances that you get your asking price.
Copyright (c) 2011 Joe Maas
by: Joe Maas