Small Business for Sale: 4 Steps to Successfully Selling Small Business at a Bigger Price in Grapevine TX
As compared to larger business, putting a small business for sale can be a a complex venture. There are a number of considerations associated with selling a small business – especially if you are hoping to earn bigger profits. It may require you to seek assistance from professional accountants, brokers, or an attorney as you go ahead with the proceedings.
Regardless of how smooth the procedure goes, putting a small business for sale can lead to extremely unpredictable results. Whether you will score bigger profits or not will depend on factors like:
- Why do you wish to sell of your small business (if money is involved, you may definitely want to secure a much more profitable and lucrative deal)
- The time and the industry trends at the time of sale
- Business operations and their strength
- Fan following, integrity, online presence, and support from customers
- Profitability or loss culture of the business
Prospective buyers are surely going to focus on all the above mentioned plus more factors before considering buying small business for sale.
The following are 4 steps that will help you sell small business at a (comparatively) bigger price.
Determine Your Reason to Sell the Business
You have finally made your mind to put your small business for sale. But why do you want to sell it? This is the first question that you should ask yourself because probably the prospective buyer will ask you similar question too. Following are some common reasons why owners often put their small business for sale:
- Retirements
- Illness and/or death
- Partnership disputes
- Boredom
- Becoming overworked
- Multiple businesses to handle at a time
- Lack of competency to continue in that field
On the other hand, some business owners also choose to let go off their business when they are no longer able to run it profitably. However, such a situation may not be the most suitable for attracting buyers or securing a good price for your business. The effectiveness and the current running/earning of your business plays a major role in getting you a good price.
Other than that, there are other factors that could help you make your business more attractice and lucrative for the prospective buyers. These include:
- Consistent income
- Increasing profits
- A strong customer base – too many loyal customers
- An active contract that will continue for the years to come.
Time to Put Your Small Business for Sale
Sales preparation should be carried out at least an year or two before time. The sooner you prepare, the brighter chances you have to improve your financial records, customer base, and the overall business structure to make it more attractive for the prospective buyers. The bigger profits you are able to show these buyers, the better price you can secure for the sale acquisition.
Moreover, making these positive changes and improvements will also simplify the transition for your buyer. This will save your business from declining or drowning soon after the shift. In fact, it will make it easy for the new owner to continue running the business smoothly. It has emotional value for a lot of business owners.
Carrying Our Business Valuation
Your personal idea in terms of business valuation won’t count. It is important that you determine the actual worth before putting your small business for sale. Also, false pricing can be a major risk when it comes to selling a business. Whether you price it high or low, it’s going to fall back on you. While higher price will not attract buyers, lowers will be a loss for you. Therefore, it is important to set the price that’s just right.
The best way to do this is to locate an appraiser and get an evaluation done professionally. It is the appraisers job to draft a detail explanation of the worth calculated by him or her for your small business. The document will bring both support and credibility to your asking price and may even become the main reason why you can get a big price when you put your small business for sale.
Finding the Right Buyer
It may take six months to two years or more for a business sale to take place successfully. The most challenging part could be finding the right buyer to quote an acceptable price for your small business for sale. It is not feasible to think of limited sources for advertising. The more platforms you use, the bigger chance that you will attract more buyers.
Once you have buyers showing interest in your business, continue and take the process to the next level:
- Do not rely on a single potential buyer. Finalize at least 2-3 just in case the first one goes wrong.
- Keep connected with your potential buyers. Don’t seem uninterested since you still own the business. Keeping good terms with people showing interest in buying your business may get you a great price for your business.
- Find out the prequalifications for financing for your potential buyers.
- While the last decision belongs to you, it is always considered generous if you keep some room for negotiations. Buyers will always negotiate, regardless of that option. So it’s better to keep a room for good.
- The agreement should always be in writing. The confidentiality/nondisclosure agreement should be signed by both parties to protect the information you are providing your potential buyer.
There’s always a possibility to miss out on a few things or documentation when you put your small business on sale. Since you don’t want to end up with a faulty agreement, it is best to work with professionals who keeps a check. We can help you throughout the process from evaluating your business to finalizing the deal. Contact us now and learn more.