The Top 4 Business-Selling Myths
Myth #1: I Can Sell It Myself
Ask yourself these questions:
- Have I ever sold a business myself?
- Can I maintain confidentiality and keep knowledge of the sale from employees, customers and suppliers?
- Can I financially pre-qualify every buyer?
- Am I able to stay 100 percent committed in time and effort to running and growing my company while also trying to sell it?
- Can I prepare professional marketing materials that accurately reflect the company I own?
- Do I know where to advertise and network to find the right buyer?
If you can answer yes to all these questions, you’ve got a good shot. But most business owners looking to sell benefit greatly from the services an experienced Business Broker can provide.
Myth #2: I’ll Sell When I’m Ready
Certainly, an owner wants to be sure he or she is mentally and emotionally prepared to sell. But personal readiness is just one factor. Economic factors can have a significant impact on the sale of a business.
Sale prices can be affected by industry consolidation, interest rates, unemployment and many other economic measures. Talk with a professional and aim to sell when your personal goals and market conditions align.
Myth #3: I Know What It’s Worth
Some owners will base the company value on what they need for retirement. In addition, there are dozens of opinions out there about how a business should be valued. But you have to be careful: Accepting a market value of your business from anyone who doesn’t evaluate and sell businesses for a living is just not smart.
A third party valuation done by an experienced Business Broker is a prerequisite for anyone seriously considering the sale of their business. An outside valuation will include a thorough analysis of the business and the market it operates in. This will provide a solid understanding of the company’s growth potential, not some vague industry average.
Myth #4: It’s Like Selling a House
Selling a company is much more complex than selling a house. A successful business sale usually requires a great deal of pre-planning, at least a year and maybe as long as three years to drive sales, develop key staff, document the operations and control expenses.
The average house will sell in less than four months, while the average business sale is nine months to a year.
Even after the business is sold, the seller can be expected to put in at least a few months, and possibly years of transition time, helping to make the new owner a success.
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