Selling Your Business
Selling your business is not like selling your house. How the market values your business is complex and depends on many factors such as discretionary earnings, sales activity, quality of customer base, competition and barriers to entry, growth potential, timing, government regulations, and other factors. Read why engaging a business broker is a smart move.
The Selling Process
Selling your business is a complex and lengthy process. It can take up to a year to find the right buyer, negotiate the selling terms, perform due diligence, and close the transaction. The major phases in the selling process are
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Prequalifying the Seller and signing an exclusive right to sell agreement with Crimson Cardinal Realty
Preparing the business for sale and promotion
Screening and pre-qualifying buyers
Buyer's due diligence
Executing an Asset Purchase Agreement (in most cases) with contingencies
Clearing contingencies and preparing for closing
Closing the transaction
Post transaction administration and obligations
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Unlike the sale of a home, seller are unable to successfully sell their businesses on their own for many reasons. First, keeping the transaction confidential is key. Rumors that the business is for sale may scare your customers, suppliers, landlord, banker, and employees. Next, it is hard for the owner to objectively determine the market value of the business. Many "for sale by owner" sellers list their properties "on the market" but not "in the market." Businesses priced at the "in the market" sell for what the current market offers. Business "on the market" sit and don't move. When a business sits on the market for a long time, buyer begin to believe something is wrong with the business. Third, owners do not have the expertise or the time commitment to take a business for sale to market. It takes experience, dedication, and a team of professionals. Finally, when owners try to sell their businesses on their own, they stop doing what made them successful - managing and growing their businesses. Owners are better served keep their businesses on target and growing rather than getting distracting trying to sell their businesses.
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