Selling Your Small Business Tips

Selling your small business can be highly challenging. Most businesses offered for sale will never transfer hands, according to Bizbuysell.com. Bizbuysell is the largest business-for-sale website in the world, and they report that 40% of companies are never sold. The current business broker model stopped working for small businesses long ago. Business brokers have not evolved with technology and how people make buying decisions, as in the case of small businesses. Your chance of success with typical business brokers is not good, but if you are lucky enough to sell your business, be prepared to give hard-earned profit to the business broker. Many business owners who are reading this page may have tried to sell with a business broker, but it didn’t work for a reason probably listed below:  

 

Why So Many Fail at Selling a Business?

 

Incorrect Pricing

Too many business owners set the wrong or unrealistic prices and never get a single offer or serious interest. You can have this problem if your price is too low or too high. To value your company accurately, you must be familiar with pricing models that include multiples of income, debt capacity, comparable sales data, discounted cash flow, and other models. Failure to know proper pricing will leave too much money on the table or join the 40% that never sell their company.

Too Little Advertising

You must have a large audience interested in buying a business, or your chances of a successful transfer will significantly diminish. You must also be listed on the highest-traffic business-for-sale websites, or you simply won’t be seen by enough potential buyers.

Giving Up Too Soon

You must be realistic and know that selling a business takes time. Every business is different; you should plan for at least six months. You have worked too hard in your business not to sell your company for the highest price. You will be rewarded for your patience.

Not Using Social Media

You must have multiple sources, including social media, to get your opportunity in front of thousands of buyers daily. Social media reaches people who may not be looking, but your offering catches their attention, and you attract more potentially motivated buyers. You must go where the buyers are. 

Not Keeping to Transaction Confidential

Your company can be harmed if customers, suppliers, or vendors find out the business is for sale. Everything must be kept secret until after the buyer has paid you.

Lack of Financial Statements & Documents

You must have all the proper documents before you put your business up for sale. At minimum, expect three years of tax returns, equipment lists, and year-to-date financials. 

 

Selling Your Small Business Pitfalls

Selling your small business demands a strategic approach to overcome common pitfalls and maximize your chances of a successful transaction. With a staggering 40% of small businesses failing to find buyers, it’s evident that traditional methods often fall short in today’s dynamic market. To avoid joining this statistic, prioritize accurate pricing based on comprehensive valuation methods such as income multiples and discounted cash flow analysis. Additionally, ensure widespread advertising across many platforms. Leverage the power of social media to reach a broader audience of potential buyers.

Patience is critical; recognize that selling a business is a time-intensive process that may require months of dedicated effort. Remain steadfast in your commitment to securing the best possible deal, and don’t be tempted to give up prematurely. Above all, maintain strict confidentiality throughout the transaction to safeguard your company’s reputation and minimize disruptions to operations. By addressing these common challenges and diligently preparing all necessary financial documents, you can position your small business for a successful sale while maximizing its value and ensuring a smooth transition for all parties involved. Get more information about selling your small business without a business broker here.