6 Pitfalls To Avoid When You Sell Your Business | Business Broker in Bedford, TX
Nothing that is worth doing is easy. You have to keep this little fact in mind when you sell your business in Bedford, TX. The route to your exit is paved with difficulty, so the more prepared you are, the better you will cope.
It may hardly ever be the case that you sell your business in Bedford, TX in the time you initially had in mind. Even if you sell your business in Bedford, TX in your desired time, you may not get the desired price you had in mind.
Getting the most from your sale in the present economic situation may be difficult, but you have to persevere and take things in stride with a calm and ever present mind. The challenges you along with countless others who sell business in Bedford, TX can be overcome if you have some idea of the shortcomings that you might face while selling. Read on to find out some of the many pitfalls that can occur while you sell your business in Bedford, TX.
1. Sorting out serious and able buyers from the rest
Ask anyone seasoned in selling business in Bedford, TX and you will hear echoing voices saying you need to screen and prequalify your buyers. It’s crucial for a good sale. Understandably, many people looking to sell their business avoid prequalification because they’re afraid they might scare the prospects before the final deal is struck.
The situation is actually the opposite of what these buyers think. Prequalification means that you are getting your buyers involved in the process. It also helps to get serious buyers interested in your business, and keep sensitive and confidential company info from the greedy hands and prying eyes of your competitors.
The buyer’s information is necessary to see the company’s credentials. Buyer information like financials and confidentiality agreements are important prequalification documents that help screen them out as serious or casual.
2. Unaddressed Valuation issues
Many sellers who don’t have prior experience how to sell business in Bedford, TX usually set prices on the higher end of the spectrum without having the business’s valuation done in advance. The weightage on the whole deal attached to price is very high. The asking price for the business will be used to see how long the business will stay up on the market.
Sellers skip valuation before setting the asking price of the business as they are in a hurry to get a done deal. Smart sellers who take the time to do a valuation before assigning a price to their business are the ones to benefit. The whole sale process becomes relatively smoother for them as they know the going value and price of a business such as theirs.
This gives them an upper hand in defending the price that they finally place on their business.
3. You’re not prepared
When you sell your business in Bedford, TX, the importance of preparation cannot be stressed enough. Many sellers make the mistake of not preparing enough for the sale in advance. You need to deal with man of the key facets of the business before you can deem it worthy and list it to be sold in the market.
You need to have the books in order, “cleaning up” any tarnished records or bad debts, and unpaid loans. You need to show to the buyers that, if continued in the same way that it is being currently run, your business will rake in a continued and sustainable stream of profits in the considerable long run.
You should take your lease and other expenses into account for getting the best out of your sale. Employees should not be forgotten in the process as well; your employees need to be at efficient productivity levels while the selling process is taking place.
Prepare well in advance. Business Brokers from Kirksey Business Brokers in Bedford, TX, will advise you to begin selling your business well in advance, minimum two to three years, before you actually list it for sale. This is to get your business up to par when the time comes to actually sell.
4. Not hiring sales professionals
You may know how to run your business well, but do you really know how to sell your business in Bedford, TX? It’s a sad state that many sellers do not consider hiring a professional business broker for the sake of their sale. Is the brokerage fee that you save enough to compensate for the loss you may face in selling your business?
A business broker is skilled in the sales process and an experienced one may have the contacts necessary in the market to get you a hefty premium on your selling price. There might be an off chance that your sale is just the way you panned it out to be. But in most cases, the broker’s help is undoubtedly beneficial for the sale.
Not only will the showing, preparation of the premises and negotiation be easier, but marketing your business will be easier due to the contacts of brokers in the market. This goes for any relevant areas that you do not have expertise in. You will likely benefit from the services of professionals.
5. Cash-or-Bust
No one buys all cash these days. There are negative consequences for sellers as well when taxes are involved. The buyer is likely to want some sort of concession like financing rather than giving all the cash for the business at the closing date of the sale.
They may need some time in paying for the business and help to get third party finance to pay for it. You may think you won’t have any benefits if you provide the buyer with these concessions. But consider if you get all that cash accompanied by a single receipt. The tax implications for it would be much higher than if you would have spread out that payment in a few years.
6. Hire a broker and you’re done
Just hiring a broker is not enough to get a good sale. Professionals are beneficial to your deal as no. 4 states, but not if you take a backseat in the deal. No one knows the business better than you do, so the closer coordination you have with the broker, the better the outcome may be.
Take your broker into confidence and discuss how well you can promote your business in the sale. It takes synergy to make a deal work, so actively participate in the selling process. No one knows the business better than you, and this will be play a key role in convincing the buyer to acquire your business.
To have a trusted and experienced broker help you out with your sale, don’t hesitate to contact Kirksey Business Brokers by calling 817-637-1508.