Many business owners probably won’t be able to sell their businesses when they’re ready, because they’re not taking critical steps toward a transition or toward getting the full value. These are the 3 Common Reasons Why Selling Your Business Isn't Working (And How to Fix It).
Insufficient Preparation
Lack of preparation is by far the most common mistake that small-business owners make. Lack of financial documentation, sustainable profitability, lease issues, inventory issues, staffing problems and other concerns will not only impact salability, but also the price your business will command in the marketplace. We recommend starting preparation at least one to three years before the business is listed whenever possible.
Pricing Problems
Many sellers have a tendency to set a price (usually on the high side) before they've determined value. The reason this is such a big mistake is that price is the single most important factor in determining how long a business stays on the market. Our brokers spend time to evaluate your business and conduct a thoughtful valuation process before recommending an asking price. We are more in touch with marketplace prices and better positioned to defend that price and to reap the benefit of a faster, smoother sale.
Entertaining only all-cash sales often significantly reduce the number of buyers who may be interested in buying your business. From a tax perspective, having an all cash buy can have severe tax implications. Buyers are more likely to need concessions in the form of seller financing, deferred payments or assistance in obtaining third-party financing when purchasing your business. The benefit to you as a seller is that spreading sales receipts over a multi-year period can enable you get more for your business in the long run.
Not seeking professional help
While the idea of selling your business without the help of a qualified professional may sound feasible and less costly, it is often not the best way to get the most out of your business and leads to frustration for many business owners. Many business owners find themselves struggling to maintain confidientialty, frustrated with contracts and paperwork, and with a list of buyers who either aren't serious nor qualified to purchase their business. Hiring a professional business broker allow business owners benefit of listing their business for sale without the burden of managing the listing and sale process.
Before you decide on selling your company, you owe it to yourself to call Transworld Business Advisors. There is no obligation, just a confidential conversation about how to sell your company and how much it is worth, now and in the future!
