Wednesday, November 27, 2013
Many small business owners are very involved in the day-to-day activity of their businesses. They see the potential that is available, but there may be times when a sale of the business is considered. It is possible to sell a small business, but some factors need to be kept in mind to ensure that the sale goes successfully.
According to the National Federation of Independent Businesses, only 30% of businesses that are on the market will actually sell (Source: http://www.nfib.com/business-resources/business-resources-item?cmsid=35825). This is a relatively dismal figure that takes many business owners by surprise. Although it may be difficult to sell a small business, it is not impossible. What steps are taken by those who are able to successfully sell their business?
Selling a small business is often different than selling a larger business. It tends to be more of a personal transaction. Most buyers of small businesses will be interested in the everyday operations and what is behind the sale. When a small business comes up with an exit strategy, it should contain information about why the business is being sold. Information should also be included about the value of the company and the potential that it has for growth. This often requires a professional business valuation through an appraisal company. Taking this step can often mean the difference between a successful sale and continuing to work on the business.
Consider using a business broker to help with the process. Most small business owners are very busy keeping the business running and they don't have the time necessary to market the business and to finalize the sale. The commission that is paid to a broker is going to pay off in the long run. Using a broker often maximizes the sale price while minimizing the work that is necessary on the part of the business owner. A business broker may even be able to find a buyer through their own, personal connections.
Selling a small business can be a very emotional and time-consuming venture. Many small business owners are very connected with their business and consider it a part of their lives. By selling a small business, it gives the former owner the opportunity to enjoy the financial benefits of the sale and to pursue other ventures in the future.
Kathryn Hettlinger is a business broker with years of experience as a small business M&A Advisor. In the past, she has worked with and highly recommends the California business brokers of Sunbelt Bay Area