Whether to sell or not to sell, and when, and how, are often tough questions for a small business owner. Some will agonize over these questions for months and maybe years, but never find the answers, never reach a decision, never make a plan, and never act. Yet for every owner of a good and viable business, there will come an optimum time to sell or to otherwise transfer ownership of the business. Pass over that optimum time and, soon after, the business will probably begin to decline and consequently, of those with no real succession or selling plan, many will simply forfeit their once in a lifetime opportunity for their largest single return ever from their business, as their business eventually just fades away. … don’t allow this to be the fate your hard earned business.
Well, most business owners will think about selling the business “someday,” and may talk about selling the business, many, if not most will actually develop no real action plan to do so. Most small business owners will have never sold a business before. For most, this would be a once in a lifetime event, and more importantly a once in a lifetime opportunity for the single largest return ever from their business. But having no prior experience and no plan today, may not know when or how or where to begin, and when the time arrives, many small business owners who have worked hard for years building their businesses will simply not be prepared for this once-in-a-lifetime opportunity.
Over the years in the business, we have met with, have talked with, and have worked closely with many business buyers and sellers, and have discovered generally that the two meet far less frequently and with far less success than either would hope for. We’ve learned that while both parties are seemingly always out there somewhere looking and hoping to find the other, someplace, somehow, more often than not, they don’t.
We’ve found business owners who have attempted to sell without a plan, with a wishful pricing or a “make an offer” strategy, maybe floating trial balloons within their industry or on-line, and in general, just casting a broad net in hope of gathering someone, most times without success and sometimes inflicting real damage on the business and on any future selling opportunity. We’ve found others who had done nothing but wait and wonder about ‘when and how’ until time and opportunity had simply run out.
Ironically, we’ve learned also that there were buyers looking for and willing to pay full value for just about every kind of business. Connecting the right buyer with the right business, at the right time, and achieving the right result, however, doesn’t just happen. It does require preparation; which brings us right back to the matter.
Many owners have 100 questions, but can find only 50 answers. Many owners who have spent their business lives running and building their companies, NOT in the selling of them, simply have no experience in this unique selling process, and don’t know where to find help that does.
There are certainly Business Brokers who can help. Your CPA maybe able to help. But by and large, Business-for-Sale websites, in our view, have not provided much help beyond a classified ad service. For the most part, no real ‘how to’ assistance, and the result, it seems, is often a clutter of ads, for businesses that don’t sell.
It is our intent at Business-Trader.com to offer and provide a very different level of service that we trust you will see as your read your way through the topical categories provided under our Resources menu, and more perfectly when you subscribe to our service and actually buy or sell a business as a result.
To sell, or not to sell, is most often not decided on a single question, but on several.
- Is anyone looking for a business like mine.
- Will my company sell?
- What is it worth?
- What tax consequences?
- What should be included, or excluded?
- What about the bank loan and my personal guarantee?
- What about the shareholder loans?
- Is there a good time to sell? A bad time? When is the best time?
- Where do I start?
- Where would I find a buyer and how do I approach a buyer, and with what information?
- Would any of my competitors be good prospects? Any suppliers? Customers? Employees?
- How would I approach a competitor? What will they want to see? How much can I afford to show a competitor?
- Would any of my employees be good prospects? How about an employee group?
- How would I approach employees? How much can I tell them? Does this open Pandora’s box?
- Would it make employees nervous? Customers? Suppliers? Bankers?
- How do I know whether an “interested party” is really interested in buying, or just someone interested in looking and learning?
- What if I show someone confidential material (maybe to a competitor), and they don’t buy?
- How much can I tell anyone anything, without risking the exposure of my business or trade secrets?
- What are the risks of disclosing the business is for sale? What potential consequence?
- Would it provide a competitive advantage to a competitor?
- How do I do all this without risk that might prove costly?
- Can I do this all myself?
- How much of my time would it consume? Would it be the best use of my time?
- If I try to do this myself, how can I protect and maintain confidentiality?
- How could I advertise for a buyer without disclosing intent to sell? Where could I advertise?
- Is this my forte or should I get help? Where do I find professional help? How much will that help cost?
If you have not yet developed your plan, if you will continue to read through the topics listed in the menu to the right, we trust you will find experience and information helpful to the formation of such a plan, whether it be an immediate plan or a plan for the future.