Business Sales

1. Are you sure the business you are selling is clean and spot-free? A large number of businessmen sell their businesses with outstanding debts and liabilities or some loose threads left hanging. The buyer WILL find out about this and when they do, it will spell trouble for you. You may get a lower price than what you initially offered, and even lower than the price you would normally get if you fixed it yourself and factored it in the selling price.
2. Set a realistic selling price. When it comes to business-to-business negotiations, you need to remember that the buyers tend to be businessmen themselves, and chances are they have keen business minds and an army of staff that can do computations and feasibility studies so they will know if the price you’ve got in mind is feasible or unfair.
3. There are times when a business’ chance of success has been largely dependent on the people and the institution itself has become inconsequential. This kinds of businesses may be harder to sell. For example, IronClad Recording Company may have difficulties finding a buyer if only the company is being sold, and its best-selling artists are going to migrate to a competitor. In fact, the profitable aspect of the company moving to a competitor is a sure sign that a shrewd businessman will not buy your company.
4. If you tend to micromanage or handle several things personally, and you see any problems in your company beforehand, and assume that you may need to sell it in a few years’ time, hire a second in command or a key person and try to do things from the background. Having a lot of first-hand responsibilities in your business could increase the risk factor for buyers and could affect your sales price greatly.
5. Selling your business for 100% cash may be possible but VERY unlikely and any third-party agency that claims to be able to do this should not be trusted. Majority of sellers are required to “carry paper” for a certain amount of the sales price.
6. Don’t hesitate to give your prospective buyers access to all kinds of information about the company you’re selling. It is normal and expected of them to put everything in your company under a microscope, from financial statements, to list of current employees to incident reports concerning the middle management – it is vital to them when considering whether they want to purchase your company or not. Hesitance to provide them with assistance in this regard may be misinterpreted as you hiding something.
7. Some sellers, particularly ones that number 3 may apply to, still get some sort of participation in the company they sold. Usually this is on a consultancy basis or as a stockholder. Bear in mind that the company you sold it to may have plans different from what you initially had, so you don’t have to take it personally and remember that if your plan was really good, then you wouldn’t have needed to sell the business in the first place.