When it comes to finalizing deals, successful negotiations are at the heart of the matter. It only makes sense to think about how to improve your communication skills and to choose a Business Broker or M&A Advisor who is well versed in the art of negotiation.
Cultivating Win-Win Situations
Achieving a win-win for all parties is essential, and there are many components involved. It’s essential to understand what the other party is seeking and to help them also feel as though they succeeded in the deal.
One tried and tested strategy is to lead people through a series of “yeses” by starting with topics and points that can be agreed upon and then working forward. In the beginning of this negotiating strategy, the yeses may come from getting others to agree on what may be seen as trivial things. However, this step works to create the right climate for moving forward so that yeses can be obtained on more important issues.
Maintaining the Flow of Information
The flow of information is a critical aspect of the negotiation process. For this reason, it’s best for negotiations between buyers and sellers to go through their brokerage professionals, rather than conducted directly.
The simple fact is that otherwise there are too many variables and opportunities for something to go wrong, ranging from egos getting in the way to miscommunications. When you choose a qualified Business Broker or M&A Advisor, you’ll be able to place trust in that person to achieve optimal outcomes.
Understand One Another
It is important to keep the other side talking and show that you understand their perspective and the issues they may have. It is in this way that you can encourage cooperation and diffuse resistance in advance.
Ultimately, great negotiations stem from proper strategy, preparation, proper education, enhanced communication, and understanding the other party’s needs. When you and your Business Broker or M&A Advisor foster good communications with the other party, it will enhance the chances of achieving the kind of cooperation you are seeking. This in turn, dramatically increases the chances of achieving win-win outcomes.
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Every business owner has different reasons for selling their company. Some want to retire, some want to get out of the industry, and others need cash flow.
You might be selling your business for any number of reasons, but the primary goal is always to get that money into your hands as fast as possible. So how can you ensure a quick sale?
Here are ways to sell your business that can be fast and efficient:
Tips for Selling a Business: Be Flexible in Your Pricing
You want to sell your business, but you also need to ensure that the price is right.
Price too high, and nobody will be interested in buying it; sell for too low of a price, and you might end up giving away your company.
Finding the sweet spot means striking a balance between what’s best for both parties involved. Be willing to negotiate, and you might find a buyer quicker.
Don’t be too stubborn when it comes to negotiating terms for your company’s sale.
You might think you know exactly how much money it’s worth, but the buyer has a different valuation in mind. And they’ll pay what they feel is fair market value.
More importantly, being willing to negotiate shows that you’re flexible about selling your business which will ultimately help speed up its sale. It can also lead you toward getting top dollar if done correctly.
If you find yourself not wanting or able to negotiate with potential buyers, this could slow down the process significantly.
Clean up Financial Documents
If you sell your business, be ready to hand it over in pristine condition.
This means providing a clear and complete financial picture of the company’s sales history and current standing. And that includes all documentation for taxes owed, outstanding bills, loans taken out against the company bank account, etc.
It’s only right to be honest and straightforward about your business’s financial records. Don’t sell yourself short by lying or skimping on details that could cost you a sale in the long run.
Be sure to keep good records of all transactions, including invoices sent out and received payments for said bills/invoices.
You want the business’s financial history to be in tip-top shape for whoever is buying it. Take some time to go through all of your company’s records if need be before offering up its sale.
You also might consider hiring a CPA to help give your financials a once-over. This can be helpful in showing you where any errors or problems might lie, offering clarity on the company’s records and financial standing.
Sell to a Broker
Selling your business can be a long and arduous process.
The best way to sell it fast is through the assistance of a professional broker who knows how to get you the highest price in the least amount of time.
A good broker can sell your business at a price that’s higher than what you could ever hope to sell it for on your own. And they can do this in much less time too!
A broker will work with multiple potential buyers, narrowing down the search until only one is left standing as the highest bidder. They’ll also handle all negotiations and paperwork involved in the sale of your business, saving you time and stress in the process.
Let a broker sell your business for you so that all you have to do is agree on terms before receiving payment.
Don’t underestimate just how important working with an experienced brokerage firm is when selling your business: It’s one thing that could determine whether you sell quickly.
Be Prepared To Show Off Your Business
Be open and ready to sell your business.
This means preparing for any questions that a potential buyer might ask about the company. You don’t want them wondering why it only made $100,000 last month or asking how old some of its equipment is: The more they know upfront about your company, the faster you’ll sell.
To sell quickly, sell confidently.
You sell your business by pitching it to potential buyers, proving that you know everything about what makes it such a great buy and how much money can be made with the right owner at the helm. Show them why they want to make an offer as soon as possible.
Do Not Hesitate
There is no one perfect time to sell a business.
The best way to sell your company fast and for the most amount of money possible? Sell it when you’re ready. There’s never going to be a better time than now, so don’t hesitate!
Don’t wait until your business fails or starts making less money because that could cost you in terms of both speed and price. Be willing to sell at any point regardless if things are going well or not.
Be open about wanting/needing to sell your company as soon as possible to anyone interested in buying it. Don’t play games by stringing them along or dragging your feet.
The sooner you sell, the more money you’ll likely get out of it. Make that a priority from day one, and find buyers who are willing to pay top dollar for your company as soon as they know about its availability.
To sell a business quickly and for top dollar, you need to make it as attractive as possible.
Take the time to streamline operations so that your startup can be sold in its most appealing state.
This means focusing on profitability by reducing expenses and increasing revenue wherever possible. The more money your company makes per month/quarter, the higher potential buyers will value it. And they’ll pay accordingly!
This is one of the best ways to ensure you get a fast sale when ready to sell.
Selling Your Business Made Easy
Selling your business can be challenging and time-consuming.
However, with this guide to selling your business, you’ll increase the chances of selling your company fast at the best possible price. Sell it now to be on your way to a new chapter.
Are you looking to sell your business? Contact Fusion Business Services today to find out how we can guide you through the process of selling your company fast.Read More
Created in 2012, the IBBA and M&A Source Market Pulse Survey was created to provide business owners and their advisors with a clear understanding of ever-changing market conditions.
Through this survey, it is possible to gain clarity on businesses being sold in Main Street (values $0-$2MM) and the lower middle market (values $2MM -$50MM). Scott Bushkie served as the originator of the Market Pulse Report with IBBA and M&A Source and has continued to play a key role since the report’s inception.
A core finding of the IBBA and M&A Source Market Pulse Survey for Q2 was that there has been a big shift between the turmoil of 2020 and the climate of 2021. Across the spectrum of sizes and price ranges of businesses, sellers now have an advantage or are at least in a better position to sell their business. This is quite different from the situation in 2020.
The market has shifted towards being a seller’s market for a variety of reasons including the fact that many private equity groups are now looking for ways to grow their money. Acquiring an existing business has become an increasingly attractive option to buyers due to the current labor pool conditions.
Buyers are now looking at existing companies as a way to bypass attracting talent. Instead, they can secure that talent via acquiring a new business. In short, many buyers are looking to buy versus organically build to meet their talent needs.
Another reason that now is a good time for sellers is that many buyers are looking to leave corporate America. This situation has likely been accelerated by the pandemic and people seeking to control their own destiny. The increase in global uncertainty has made the idea of becoming a business owner increasingly attractive.
The shift in climate from 2020 to 2021 underscores the value of the IBBA and M&A Source Market Pulse Survey. Through this revealing survey, it is possible for business owners and their advisors to gain a clearer understanding of market conditions and what to expect.
According to a survey on business sales, only 30-40% of businesses listed for sale will actually sell. One reason why people are unable to sell their business is that they cannot find a reliable buyer.
Are you looking for a guide to selling your business and want to learn how to attract the best buyers? Keep reading this article to learn how to sell your business and for tips on finding the best buyers for your business.
Start the Search
One of the first and most important steps of finding the right buyer for your business is to start the search! If you wait for buyers to come to you, you will be waiting for a long time.
Rather than simply posting your business for sale, you need to start a process to find the best buyers in order to get the best deal possible.
One thing that you can do is make a list of potential buyers. Your buyers may come from current employees, customers, or even your competitors. You never want to rule anyone out, as anyone can be a prospect when buying a business.
You can also utilize platforms that allow you to create listings for your business sale. This way, people who are already interested in buying a business in your industry will be able to have your information.
By starting the search and being proactive, you will be able to find the best buyer.
Next, it is important to pre-screen each of your potential candidates when you are selling your business. This is an easy way to weed out people who are not qualified to buy your company and to find the best buyer possible.
A simple way to screen your candidates is by hiring a broker. This way you can be confident that someone is financially qualified to buy your company.
When you screen your candidates, you will want to gather important documents like confidentiality agreements, financial background information, and past experience.
If you have interested buyers that have owned or managed a business in the past, they will be a more experienced option.
Meet With Multiple Buyers
Something else that can help you find the best buyer for your business is to meet with multiple buyers. Just as people test drive several cars before settling on the best option, you should do the same with buyers.
Make sure you meet with each of your qualified candidates so you can learn more about how they would run your business.
Meeting with several buyers is also an easy way to get a better deal on the sale of your business. Rather than choosing the first offer you get, you can wait for someone who is more interested in your business and will be willing to pay a higher price.
Identify Your Company’s Strengths
One of the best tips for selling a business is to get your business in good shape and highlight your company’s strengths. When you are selling a home, you will often get it staged to show buyers its potential.
When you are selling a business, you also should highlight features that make your business attractive and valuable.
Highlighting your strengths will show potential buyers what your business has to offer and will help you find the best buyer possible.
Don’t Hide Your Weaknesses
While you want to showcase the strengths of your business, you do not want to hide your weaknesses. Even if you can hide them temporarily, the truth will eventually come out and may lead to problems with your buyers.
Instead of hiding your weaknesses, it is best to disclose any issues with your business upfront. This way, you can work to improve any problems and your potential buyers will be completely up to speed with your business.
Know What You Are Looking For
Finally, it is important that you know what you are looking for in a buyer. While your main goal may be to sell your business and make a profit, you also want to make sure they align with your business goals as well.
For example, you wouldn’t want to sell your company to someone who would immediately hire all-new employees or who would take your business in a completely different direction.
Make sure you understand the objectives of potential buyers and know what characteristics you are looking for in a new business owner.
Hire a Professional Business Broker
Finally, you should hire a professional business broker to help you find the best solution for your business.
As was mentioned before, brokers can help you screen your buyers. However, they can also help you understand each of your options when you are selling your business.
This way, you will be completely prepared to sell your business and will be able to get the best deal possible for the sale of your business. Hiring a business broker is one of the easiest ways to sell your business.
Start Selling Your Business Today
When you are selling your business, it can be difficult to find the right buyers to take over. By following each of these tips, you’ll find that you can sell your business faster to the right person.
Do you need help selling your business? Fusion can help!
We help our clients understand each of their options when buying or selling a business. With our in-depth planning, you will be fully prepared to make the best decision possible when you are learning how to sell your business.
Contact our team today to learn more about our services or to schedule a call with our expert brokers.Read More
Out of all the businesses listed for sale, only about 30% to 40% ever sell. There are many reasons why your business sale may fail to go through. It could be that your business is bleeding cash, you have overpriced it, you have irreconcilable flaws, or you lack a professional business broker.
Now, if you’re trying to figure out how to sell your business for its maximum price, we have a guide for you. Read on to find out what goes into selling a business and how a business broker can help the process.
Start by Finding a Professional Business Broker
When selling a business, you basically have two options to consider. Sell your business on your own or use the services of a professional business broker. Selling on your own would be a great option if you were to sell it to a family member or a trustworthy person.
However, if you’re putting your business on the market, hiring a professional broker would be your best bet.
A business broker will bring a wealth of experience in selling businesses and will know all the secrets of how to sell a business successfully. They’ll come armed with the skills, expertise, and competence necessary to cover all areas of the sale.
One of the best things about hiring a business broker is the fact that they’ll maintain confidentiality. During a business sale, keeping your business information confidential is essential. It could potentially ruin your company’s future if released to the public.
A professional business broker will only release sensitive information to buyers who are ready.
A broker could also keep your company’s name from potential buyers, protecting you and your business in the process. Having a broker take care of the business sale means that you’ll have time to maintain internal focus and prevent disrupting the business.
Even better, a broker will have an extensive contact base and a vast network, so finding potential buyers will be easier and will take less time. Finally, a business broker has experience in negotiations. They’ll scrutinize business contracts, and you’ll be assured of a smooth sale and transfer of ownership.
Determine Your Business Valuation
You may think that you have an idea of how much your business is worth. However, a lot of entrepreneurs have found that the number in their minds is way off the mark of the actual value. This makes a business valuation process imperative before listing a business for sale.
You see, overpricing means it could stay in the market too long, and underpricing means that you could go at a loss. The valuation process involves hiring a valuation expert to calculate a realistic estimate.
They’ll offer you a detailed report and documents showing you approximately how much you should sell your online business for. One good thing about a business valuation is that it will help you give credibility to your asking price.
Now, a business valuation is not something you wish to go through yourself. However, if you do, there are three valuation methods. You can use the market value approach, asset-based approach, or earnings value approach.
Still, there are many other factors to consider. Things like business debts, industry trends, and similar companies for sale. If you decide to hire an appraiser, your business broker will help you find a professional within their network.
Get Your Finances in Order
Now that you have already determined the value of your business, it’s time to get your finances in order.
When you decide to sell your business, understand that it will put a lot of prying eyes on your financial records. Get ready to accommodate not just potential buyers but lawyers, accountants, and valuation firms.
To ensure that your business sale goes through seamlessly, make sure that your bookkeeping is immaculate in advance. Most potential buyers will ask to see accurate financial statements and tax returns from at least three years.
Financial statements will include anything from cash flow statements, income statements, balance sheets, and the like.
Understand that if your finances are disorganized, it’ll be a potential red flag for potential buyers. Any inconsistencies will also raise a plethora of questions. Bring in a professional bookkeeper if you don’t have one already and make sure that everything is in order.
Look for Pre-Qualified Buyers
One of the best things about having a business broker when selling a business is that they’ll help you get pre-qualified buyers.
It’s essential for you to find multiple buyers who are already pre-qualified for several reasons. One of the most significant reasons is that you’ll be disclosing sensitive business information.
Such information could be worth a fortune if it got out to your competitors. It’s possible that one of your competitors or someone acting on their behalf will make an offer just to check out your finances. Beyond that, most business transactions rely on third-party loans.
If the loan is denied, the sale will not push through, and you’ll be back to square one.
On average, it takes about six to eight months for a business to sell though it could be easier with a professional broker. In the meantime, keep increasing your business value for better offers.
The length of time it takes could also depend on whether you’re selling to an individual buyer, a strategic buyer, or a private equity group. Individual buyers may need a loan while private equity groups could fund the purchase themselves
A professional broker will also leverage multiple buyers to get the maximum value for your business.
Finalize the Process
When you finally find a qualified buyer, finalizing the process will involve signing contracts and getting legal documents in order. This is where your business broker really comes in handy because the process can be confusing, if not messy.
It’s also advisable to have your business lawyer present. They’ll handle all documents associated with the sale. These include asset listings, the non-compete agreement, bill of sale, security agreement, and purchase agreement.
Once they have everything in order, all you’ll have to do is sign the agreement, and your business sale will be complete.
A Detailed Overview of How to Sell Your Business
Now that you have some basic understanding of how to sell your business, go ahead and search for the best broker in your area. That said, if you’re looking for professional brokers to sell your business, get in touch with us, and we’ll embark on this journey together.Read More