How to Have Realistic Expectations When Selling Your Business
Selling a business can be a rewarding experience. It can be the culmination of your life’s work or simply a way to free up funds to start your next venture.
If you decide you’re ready to sell your business, here are six things to keep in mind during this exciting and complex process:
If you’re selling your business and expect to command a high selling price because you think you’re sitting on a gold mine – you might need to reframe your perspective. Although you may know your business has potential, buyers won’t pay a higher price for your business on that basis alone. A proven revenue stream is what gets your buyers attention.
2. The Bottom Line
While your revenue figures may be impressive on paper, the number that really matters is the profit a business can turn. A buyer may not be impressed with your business if your expenses are way out of line, or worse, putting you in the red.
3. The Proofs in the Pudding
Speaking of revenue – is it verifiable? Simply claiming a revenue stream isn’t good enough for a buyer. Be prepared to show invoices and matching deposits as proof of that income.
4. Past Success Don’t Always Equate to Future Success
A buyer will not be interested in stories of days gone by. Your business may have been rolling in revenue and in profit five years ago, which is all well and good for you; however, what matters is what is happening now and within the last 12 months.
5. Do What Your Mother Told You
Honesty is always the best policy. Sound familiar? It should because the best policy in all business transactions, including selling your business, is to be upfront about everything from the start. An investor understands that all businesses have positive and negative aspects – no business is perfect. Being honest from the start will mean less of a risk of a deal going sour during due diligence.
6. Endless Questions
Investing in businesses is more popular than ever nowadays which means there are a lot of inexperienced buyers looking to buy a business. Selling your business on your own can lead to being asked a lot of questions – all of which you’ll be expected to know the answers. Using a broker, whose job is to vet buyers and handle these endless lines of questions, can be one less thing to worry about in the selling process. But that’s not the only thing a broker can do for you. To learn more about using a broker, contact Cress V. Diglio.
Cress V. Diglio, Florida Business Broker
Whether you are looking to buy a business, sell your business or merge with another business, Florida Business Broker Cress V. Diglio has the experience to assist you in all facets of the transaction. Call Cress today for complete transaction support and expertise, 888-984-4208, or visit https://floridacertifiedbusinessbroker.com.