Selling Your Business For The Best Price
Selling your business? You’re not alone. Over 10,000 businesses are sold every year, and that number is only rising! Selling your business can be stressful, and finding the right price to sell it for is even worse.
Luckily, with the right tools, you can sell your business quickly and for the right price. Let’s talk about that.
How To Sell Your Business For The Best Price: Create A Checklist
Having a “sell your business checklist” should be your first priority. You basically want to crunch the numbers, look for hidden factors that can increase your sale, and determine how you’re going to sell it.
Consider All Factors
There are so many moving parts in a business, and there’s no one-size-fits-all way to determine what makes a company valuable. Brand loyalty, ad success, business location, scale, employee satisfaction, employee efficiency, the company’s assets, and its liabilities. Those are a small few.
Do the math and trying to value a business is tricky but it’s important to determine your selling price. Try to consider any unique factors to your business as well.
Determine Your Minimum And Ideal Price
Once you have a checklist and you’ve considered all the factors that should go into your price, you should have an ideal price tag as well as a minimum that you’ll accept. To create an example, we’ll say that after you’ve determined your business’ assets, liabilities, and prospects, you think that the ideal selling price would be close to $300,000.
If that’s the case, maybe you’re getting close to retirement, you have your social security coming to you along with your retirement account, and you’re looking to get the business off your hands so you can get to what you want to do. You don’t want to involve yourself for 2 or 3 more years just to get that extra bit out for your ideal price.
In that case, your absolute, bare minimum with no wiggle room at all could be something like $200,000. This makes sure that you walk away with enough to keep yourself going, maybe invest it into something else like a rental property, clear all your debts, and you’re good to go!
Now, you want to avoid that bare minimum as much as possible, there’s no doubt about it. $100,000 is a big difference, and you earned that money by running a successful business all this time. So, in the event someone offers you close to that low range, you let them know your bare minimum is something like $275,000! Keep your low figure in your head.
Figure Out Your Options For Buyers
You can take out ads in the newspaper or post “for sale” signs at your location. You can also sell your business online by posting them to business sale websites. There’s a lot more you can do, but the most important thing is to maximize the number of potential buyers you can find, as this will ultimately get you the best price.
Once You Have A Buyer, Make An Offer!
They may make the first offer. It’s your job to counter it if you have your prices in mind. Sticking with the $200,000 to $300,000 example, let’s say they offer you $225,000 for your business in cash. You might be happy with that but now you’re guaranteed a minimum payout of that. Keep the offer on the table at all costs.
If this event pops up, do everything you can to avoid burning that bridge. However, you can still negotiate. You can say: “You know, I ran through the numbers, this business has all of these great amenities to offer, we already have great employees and management, and our customers are very loyal. I definitely think this business is worth $320,000.”
You’re going high, sure. That leaves the space in the middle wide open to meet. While that’s a good opener for a negotiation to begin, it doesn’t mean it even has a shot at working. As we said, don’t burn the bridge. You want anything that’s above your minimum to stay on the table.
If they aren’t budging on a dime, say to them that you’re going to keep their information and that you’ll update them as soon as possible. If you get a better offer, great. If you don’t, you’re still ahead of your minimum.
What If I Can’t Sell Above My Minimum?
If you find yourself in a situation where you think you aren’t going to get a fair deal, have your business evaluated and let any potential buyers know exactly what your company is worth.
From there, you have a firm figure that you can use to your advantage along with any other selling points you have in your business. Think of it as if you’re selling your home. “The house was valued at $300,000 on Zillow, but it comes with a pool, central air, and all of these amenities not taken into account.”
What If I Can’t Find A Buyer?
If you’re expecting to put your business on sale on Craigslist and get a bite the next day, you’re in for a surprise. If you’ve exhausted everything you can think of and aren’t having any luck, it’s time to call in the professionals. Hiring a business broker to sell your business is like hiring a realtor to sell your house. It may cost a fee in the end but it’ll likely make you more money and do it in half the time!
Get The Best Bang For Your Buck!
If you’re looking to sell your business, you don’t have to do it alone. Hiring a broker will create more interest among potential buyers, sell the business quicker, and ultimately put more money in your pocket. If you’re interested, be sure to check out our seller’s tutorial to learn more!
