If you are thinking that it might be the right time to consider your exit strategy from your business, then it’s a good idea to get in contact with a Business Broker to find out how they can help. Here we outline the main ways that a Business Broker can be of service to a business owner who, for whatever reason, will be exiting their business in the near future.
Valuation
How do you know if you are ready to sell your business if you don’t know what it’s worth? A Business Broker can do a valuation of your business, and give you an opinion of value. It will be the price that the Broker feels is the most probable selling price, based on your owner benefit, and sold comparable businesses. A Business Broker is the best professional to value a business, because we know how businesses should be valued, in order to market them for sale. CPAs and accountants will often charge $5,000-$10,000 for a valuation, and while they are definitely are a trusted resource for all things tax and accounting related, they are not experts in valuing businesses to be sold. Furthermore, they don’t have access to comparable sales, which is one of the primary tools a Business Broker uses to calculate the correct industry multiple to find the market value of the business.
Preparation to Sell
The very best situation for a seller is when they appoint a Business Broker 1-3 years BEFORE they intend to sell. The Business Broker can do a valuation of their business’s current state, and offer suggestions on how to improve their numbers over the next year or so. That way, when the times comes to actually list it for sale, the seller will be in a better financial position to ask for an even higher purchase price than they could get for the business with today’s financials. The advice of a Business Broker can help the seller work to get their business in the very best position to sell, and to sell for as much money as possible.
Sell Your Business
When you are ready to exit your business, a Business Broker specializes in confidentially marketing your business for sale, finding a qualified buyer, and facilitating the sale process. The average time it takes to sell a business is about 6-9 months for well-priced businesses. A Business Broker will work with your financials to give you a valuation, which, in the Business Broker’s opinion, will be the most likely selling price. Using a Business Broker’s services to sell your business will make it so that you can focus on and continue running your business, so that it stays in top-shape to attract prospective buyers. Let a Business Broker take on the marketing, pre-screening of buyers, contract preparation, facilitating of Due Diligence and the contract to close process. A Business Broker will work with you to help you reach your goal of selling your business.
Facilitate the Sale to A Specific Buyer
Sometimes, a business owner does not want to market their business for sale, because they have a buyer already. Often this is a family member, partner, or employee. They have identified the buyer, but they aren’t sure how much the business is worth and they don’t know where to begin to find the right contracts to put the deal together. That’s exactly where a Business Broker would come in. We would value the business, prepare the purchase contract, and facilitate the sale process all the way to the closing table. Rather than taking a percentage of the purchase price, like a normal business listing, we would perform all of these services for a flat fee. Having a Business Broker help facilitate the sale ensures that the assets are all transferred legally and the sale is done correctly.
Sell Your Business Assets
If a business owner wants to sell their business, but it is not making a profit, then we can always take a look at selling the equipment and tangible assets that the business owns. In many cases where restaurants or construction is involved, equipment is very valuable. Basically, a Business Broker would sell the entire business, based on the market value of the tangible assets. That way, someone looking to get the equipment, would want to purchase the business for the equipment value. This pricing situation would depend on the circumstances, and your Business Broker would be able to advise as to whether or not this would be the best strategy to get your business sold.
If you have questions about selling your business, give us a call or drop us an email. We offer a free, confidential, no-pressure consultation.