What Questions do you Need to Ask yourself if you Have a Small Business for Sale in Grapevine, TX
There are a couple of reasons we can think of, from the top of our heads, that businesses are sold. Maybe the investors are forcing the management to make a sale because of declining profitability, or the company is facing bankruptcy. Maybe there is a disagreement between the founding partners or the sales offering is just too outrageous to let go completely.
The Questions to Ask
There are many “straight-after-college” businesses that went up for sale just after a decade or so of operations. Not many people have an exit strategy for that time because they didn’t plan that far ahead. Maybe you are one the people who have a small business for sale in Grapevine, TX. Maybe you got a surprising offer from a potential buyer while you were looking for buyers. Selling a business is a personal as well as professional experience, especially if you started it from the ground up. When you have a small business for sale in Grapevine, TX you should be prepared for the challenges that lie ahead. Ask yourself these questions to know if you are prepared to let go of your small business for sale in Grapevine, TX.
1. “Does the buyer share my vision for the business?”
Your small business for sale in Grapevine, TX has a lot of blood, sweat and tears behind it (we hope). You toiled day in and out, and did so with enthusiasm that one day your business will speak for itself through success. As is the case with many small businesses and entrepreneurial ventures, you may have a team of employees that you have developed a relation of trust with. Under new top management the employees might become disengaged and lose productivity. A good way to make sure that that doesn’t happen is to find a buyer who shares in your vision for the future of the business. You should be able to ascertain if the buyer is willing to invest themselves emotionally and financially, and has ideas to shape the business and its employees.
2. “Am I ready?”
All people are money driven to some extent. There have been many social experiments to testify this. Passionate entrepreneurs at heart are not. They have invested their heart in soul into what they do to such an extent, that no amount of money will allow them to let go of their business.
If you have a small business for sale in Grapevine, TX, ask yourself, “If someone gave me a hundred thousand dollars (set an appropriate benchmark for the worth of your business) would I be willing to sell?” If you answered yes, and with little thought, it means you’re ready to go ahead and sell your business. If you were still hesitant in answering and even if you answered yes, there was a part of you that said you weren’t ready to let go of the business just yet, that is perfectly fine. It just means you are not ready yet and still have to find a buyer who’s worth it or you still enjoy being in the business.
3. “Is the deal finalized and legally binding?”
A famous Chinese saying follows, “don’t sell your ox till you’ve found a horse.” In case of a small business for sale in Grapevine, TX this couldn’t hold truer. Nothing is final before it is written on legal paper and made binding. There are more than a few instances where people found a buyer for their business and just at the last minute, because the deal was not legally binding, the buyer backed out.
Instances such as these can be brutal is you have a small business for sale in Grapevine, TX. The paperwork will move along slowly and your job is to get through it regardless of pace. In the meantime, it would be wise for you as a business to keep the flow of operations alive until the last of the handovers are realized on paper and in reality.
4. “What does my trusted advisor have to say?”
You may have the skills in running the business but are you equally skilled at valuation and its multiples? The likely answer may be a no, but we could be wrong. If you are not qualified to have a financial valuation of your business done, you might know someone who is.
This someone is your trusted financial advisor who will have a neutral and first-hand look at your balance sheet and income statement to figure out a realistic value for your business.
Kirksey Business Brokers has qualified financial advisors to help you to reach and realize an accurate value of your small business for sale in Grapevine, TX.
Having said this, there are numerous advantages to hiring financial advisors despite the fees they charge. It may help to maximize value as it has a neutral third party value the business and reassure the buyer of the price to keep them honest about their offer. It also helps to speed up due diligence and negotiations with financial advisors.
5. “Are the business’s financial affairs in order?”
Are business loan evaluations and mortgages tough? A potential buyer is tougher than both these instances combined. With quarterly reports, most current balance sheets and tax returns for a good 2-3 years, the evaluation of your small business for sale in Grapevine, TX is not a joking matter.
And if that wasn’t enough, clever buyers will also ask you to outline how much your average customer’s lifetime value is (revenue over the duration that the customer did business with you), how much it costs to acquire a new customer for your business, how far is your reach in the market and how well integrated are your back-office operations.
Coming back to taxes and returns, a good track record will likely get you a hefty sum on the final paycheck for your business. But you were running a business and tax minimization through revenue structuring is second nature. This makes it tricky overall to get profitable tax returns year on year.
Are there any questions we missed? Be sure to let us know!