Selling a business is a complex process that requires careful planning and execution. Avoiding common myths can help you achieve the best possible results. Contact NAI 1st Valley Business Brokerage and speak to Bill Shattuck to learn how we can assist you in selling your business.
A few examples of the diverse range of businesses successfully sold include:
- Three County Title Company
- Private School
- Liquor Licenses
- Retail Businesses
- Finance Company
- Car Wash
- Eye Clinic
BILL SHATTUCK, CCIM, CBI & QB
Certified Business Intermediary
Welcome to NAI 1st Valley's page on Business Brokerage! If you're a business owner looking to sell your business, you may be wondering if you should hire a business broker. In this page, we'll explain why you should use a business broker and debunk some common myths about selling a business.
Why You Should Use a Business Broker
Selling a business can be a long, tedious, and stressful process. It can take up a lot of your time and distract you from running your business. Utilizing the services of an experienced, professional business broker can help you focus on running your business while they guide you through the complicated process of selling your business.
Here are some areas where a business broker's expertise can make a difference:
Confidentiality: If you're trying to sell your own business, the process can reveal that the business is up for sale. This can make employees, customers, suppliers, and bankers nervous, and competitors may take advantage of the situation. A business broker can protect the identity of your company by using a blind profile that describes your company without revealing its identity.
Valuing Your Business: Putting a value on a business is more complex than valuing a house. A business's value is determined by many factors such as sales, earnings, performance, market outlook, personnel, net book value, and fair market replacement value of equivalent operating assets. But it can also be influenced by intangible assets like the company's image, reputation, and goodwill. A business broker can help you determine the value of your business and maximize the sale price.
Marketing: A business broker can help present your business in the best light to maximize the sale price and can expose the business in a confidential way to a large universe of prospective buyers. Today, most buyers are coming out of corporate America and are willing to relocate. They are intelligent, have the financial resources, and are eager to buy a job.
Reaching Potential Buyers: Business brokers have the tools and resources to reach the largest possible base of buyers. They then screen these potential buyers for revenue that would support the potential acquisition.
Closing the Deal: Since the business broker's sole function is to sell the business, there's a much better chance that a deal will be closed in less time. The faster the sale, the lower the risk of employee problems, customer defection, and predatory competition.
A reputable business broker will ask you the right questions to help you organize your thoughts, review your priorities, and understand what the market will bear. In the end, you'll find yourself in a better position to negotiate and close the deal.
Avoiding Common Myths When Selling Your Business
Selling your business is a complex process that requires careful planning and execution. As a business owner, it's important to be aware of common myths that can derail or seriously affect a potential sale. Here are some myths you should avoid:
Myth 1: I Can Sell It Myself
Many business owners believe they're qualified to sell their business without professional assistance. However, selling a business is not like selling a product or service. If you're looking to sell on your own, confidentiality is lost. Word of a potential sale can get out, leading to risks of losing clients, employees, and favorable credit terms. Do you really have the time to run your business and compile marketing materials, advertise, screen buyers, give tours, and facilitate due diligence? When you're looking to sell, you want to put even greater emphasis on running your business, boosting your sales, and not taking on new challenges. Utilizing the services of a reputable business broker can save you time, money, and stress.
Myth 2: I'll Sell When I'm Ready
While personal readiness is important, economic factors can have a significant impact on the sale of a business. Sale prices can be affected by industry consolidation, interest rates, unemployment, and many other economic measures. Timing is crucial, and it's important to consider the economic climate when deciding to sell your business.
Myth 3: I Know What it is Worth
Some owners will base the business value on what they need for retirement, dollar amount for each year they were in business "sweat equity," or industry multiples. However, determining the value of a business is more complex than these methods. A business broker valuation is a good idea for anyone seriously considering the sale of their business. An outside valuation will include a thorough analysis of the business and the market it operates in. This will provide a solid understanding of the business's growth potential, not some vague industry average.
Myth 4: It's Like Selling a House
Selling a house is a straightforward process that takes a few weeks. However, selling a business is much more complex. A successful business sale usually requires a great deal of pre-planning, developing key staff, documenting operations, and controlling expenses. Even after the business is sold, the seller can be expected to put in at least some time for a smooth transition, helping to make the new owner a success. It's important to work with a business broker who has the expertise to guide you through the process.