Selling a business isn’t as simple and fast as it seems to be. The process is quite complicated and takes quite some time for the deal to be closed. Reasons for selling the business may vary from the owner, such as retirement, or the owner wants to move onto another venture. Before selling a business, there are many things that an owner should consider:
- Buyers will pay for profits not potential
Many owners think that their business is a potential gold-mine. If a business can’t convert the potential that the owner is claiming into profits, the potential buyers won’t pay for the potential. They will only pay for the revenue a business is earning. Buyers want to acquire something that is already successful, not something that is an unproven concept.
- Buyers expect clean financial records
When looking to buy a business, buyers require verifiable proof of anything the owner claims especially when it comes to finances. Buyers expect clean financial records with no signs of suspicious transactions or other shady transactions. The owner should also have the business’s finances reviewed and audited by an outside reputed CPA firm. If the owner says the audit was done by a firm he personally knows about, it may raise many red flags with the buyers.
- Come forth with the weaknesses
The buyers know that no business is perfect, and every business has its positives and negatives. It’s better if the owners come forth with the weakness from the start. If the buyers unearth some weak points later on, the deal may turn sour.
- It will take a lot of time
On an average, selling a business takes around 6-9 months, starting from the moment the owner starts looking for a potential buyer. Many surveys have revealed that 54% of brokers saw businesses from 2007 – 2016 sell in 6-11 months. The time required will also depend on other factors such as industry, location, financial performance, current economic conditions and many others.
If you are looking to buy or sell business, can consult ValleyBiggs Technology M & A consultants. They are experts at offering advice and help to anyone looking to sell and buy businesses.