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5 Things to know for Selling Your Business | Sell my Business Jacksonville

Selling your business can be challenging. How do you determine its worth? What about finding the right buyer? How will you keep your competitors, customers, and employees from knowing that you’re putting your business for sale? What are all the other steps involved? Read this blog and find out:

Selling your business is not a simple and straightforward process. Getting it wrong at the start can ruin any hopes of a sale and can mean many months of your time wasted. However, the rewards can be great, and ultimately, life-changing, so if you decide to sell, there are 5 key things you need to be aware of that will help you prepare and maximize your chances of success.

Let’s look at 5 important things you should know before selling your business:

selling your businessTry understanding the value of your business from a buyer’s perspective

It’s very common for business owners to fixate on a sale price from start to finish. While it may seem counterintuitive, such sellers are prone to leave money on the table.  Finding the right buyer is important, and it’s far more important to ask yourself who the likely buyers are and why they want to buy your business. Before you negotiate, determining how a prospective buyer intends to deploy your business as a strategic asset can get you more for your business.

Buyers won’t pay more for potential

We regularly speak to businesses who believe they are sitting on a potential gold mine. Somehow they always expect to command a high selling price based on perceived potential alone. Unfortunately, this isn’t how it works. If a business is simply a concept without a proven revenue stream, there isn’t any business valuation in the eyes of the vast majority of potential buyers.

Suppose they were interested in developing their own business from the ground up. In that case, there are many resources to help them get started, and they would not be looking to buy something already established in the first place. Buyers always look forward to acquiring something that’s already successful, not an unproven concept.

Most buyers are interested in profits, not revenue

Another common misconception is that buyers get easily impressed with revenue figures. Sure, they sound sweet, but when it comes down to it, the only number that matters are the profit a business turns

Follow these two scenarios for a better understanding:

  • Business A: $20,000 monthly revenue, $15,000 monthly expenses, $4,000 monthly profit and $50,000 annual profit.
  • Business B: $8,000 monthly revenue, $1,000 monthly expenses, $6,000 monthly profit and $105,000 annual profit.

The monthly revenue for Business A is more than two times the second business, but the actual profit is almost half. Experienced businesses believe in profit numbers, not revenue.

Fully understand vulnerabilities

All businesses, especially small business owners, face operational vulnerability. However, it’s easy to be protective and even defensive, and it can be difficult to be appropriately critical. Allow yourself and your advisors to make realistic assessments to better position the team for a successful sale.

Make sure that you embrace all the operational weaknesses. In addition to the ones that are known, find those that aren’t yet discovered or understood.  Similarly, be aware of contingent liabilities; it’ll help.

If it’s not practical to fully eliminate the problem before the transaction, acknowledge and own it before the buyer discovers it. That way, you can formulate a plan for disclosing and controlling the message to the buyer. It also covers your interests when the buy‐sell contract is drafted.

What professional assistance do you need for a successful transaction?

Julie BrigmanLike most of life’s large projects, reaching a truly successful conclusion to selling your business requires some assistance. Assembling the right team of transaction professionals should be your priority to ensure that your objectives – whether price, legal terms, financial statements, timing, future of the business, or your long-term goal are achieved.

This team should include professionals in various specialties. An accountant to provide financial guidance and assist in diligence, a transaction attorney to ensure legal protection, an investment banker to maximize value and guide the transaction to closure, and most importantly, a business broker. Well, at least you don’t have anything to worry about the last one. Julie Brigman will cover it for you.

If you’re searching “Sell My Business Jacksonville,” Julie Brigman can solve your query

In any case, if you have finally decided to sell your business, you should consider all these points carefully. It is shocking to see business owners, who had always scrutinized every business decision they ever made minutely, decide to sell their company after receiving an unsolicited offer from a single buyer.

If an offer triggers your interest in exploring a sale of your business, Julie Brigman can help you walk through the critical details and help you till your transaction takes place. Contact her today!

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