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Give Your Web Site a Small Business Marketing Tune Up
Your web site is like your car. Both are significant investments that require the right features and regular and proper maintenance to ensure maximal satisfaction and performance. Your car is a finely tuned machine. You bought it not only to get...
How to Keep PR Working for You
Managers in the non-profit, association and business worlds need to persuade outside audiences with the greatest impact on their operations to their way of thinking. And then move those external stakeholders to take actions that help their...
Important Qualities Of Successful Home Business Owners
Copyright 2005 Benjamin Scott
Home business owners have a lot in common. They have free time to spend with their families. They have money to save for college education, retirements, vacations, and special luxuries that make life a little nicer....
International business for small and mendium companies
Small business and medium size business. What can they do, and where can these businesses expand to? Is it real to go to international business stage? How it's possible? What regions are best for foreign investors? I will try to explain you...
Maximise your compound interest, FREE mortgage quote
Compound interest is the very method that finance companies have made their money for many decades. However at last competition from a booming worldwide economy has forced the industry to give consumers a better deal.
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The 10 worst mistakes you can make when selling your privately owned small business
Thinking about selling your business? You are not alone. CNN Money reports that 35 million baby boomers are expected to retire between 2000 and 2020. If you are approaching retirement or soon will be, chances are you’ve considered putting your business on the market for one of the following reasons:
• You feel burned out;
• Industry conditions have changed;
• You are facing health issues;
• Your business has matured and plateaued;
• Your business is doing well;
• It’s a good market for the sale of a business.
In the end, no matter what your scenario or reason for selling, your objective is to get the most money for your blood, sweat, and tears. Here are ten mistakes not to make when selling your privately owned small business:
1. Not Knowing Your Business’s True Market Value:
Different buyers will have different perceptions of value and some will pay far more than others. Unless you know your business’s range of value you are handicapped in the process. Knowing value is always the best starting point when you plan to sell your business.
2. Having Customers, Employees and Others Know that you are Planning on Selling:
Keeping the entire process completely confidential is essential, otherwise you create the risk of losing employees, customers, and vendors. This will negatively impact both value and marketability.
3. Stating an Asking Price:
Putting a price on a business creates a ceiling. If you are able to find that “value added” buyer who will pay a premium for your business, a stated price may result in a lot of money left on the table.
4. Providing Seller Financing:
There are a number of lenders who will finance buyers wishing to purchase privately owned businesses. Your objective should be to get “cashed out”. If you do provide any financing, it should be a small percentage of the sales price.
5. Allowing the Buyer to Control the Process:
If you allow interested buyers to dictate “what” and “when”, you will find that you end up going through lots of processes (such as due diligence) numerous times rather than only once, which should be done solely with your prevailing buyer.
6. Not Having Multiple Buyers Involved in the Process:
There is an old saying in the mergers and acquisitions industry: “one buyer is no buyer.” This simply means that with three or four buyers
competing for your business you are more likely to end up with the best possible transaction regarding price, tax
structuring, getting cashed out, and having a low litigation risk profile.
7. Not Understanding Essential Tax Issues:
After tax dollars in the sale of a corporation can vary between 45% and 85% of the sales price based solely upon tax structuring issues. This means that you need to understand the process before you start the process.
8. Neglecting Your Business While Trying to Sell the Business:
Psychologically, once you decide to sell your business there is an inclination to slow down or spend time on the selling process to the detriment of the business. If you do this, earnings will suffer and it will lower your business’s value, negatively influencing
marketability.
9. Handling the Process Without Professional Help:
If you are struggling with the decision to hire a professional to help sell your business, consider these gruesome war stories about people who
have traveled this path alone and ended up:
• Paying more in taxes than they might otherwise have had to;
• Sold far below their true range of value;
• Financed the buyers and ended up not getting paid;
•Spent time and money during the process and still did not get
their businesses sold;
•Ended up with poor legal documentation resulting in legal problems.
Typically, the sale of a privately owned business involves a large
percentage of the seller’s net worth. Don’t begin your learning
curve at ground zero.
10. Paying Front End Fees to Merger and Acquisition Firms or Brokers:
If you elect to get professional assistance you are advised not to pay brokers and others front end fees other than the necessary fees to close the transaction. Many firms in recent years have collected substantial sums of money from clients without ever
selling their business. Ultimately, how you sell your business is just as important as how you run it. Do your research and carefully consider engaging the services of an experienced, proven professional with a stellar reputation.
About the author:
Barry Evans writes about san diego merger and acquisition firm. Learn more at http://www.acquisitionservicesgroup.com.
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United States Small Business Administration |
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Microsoft Small Business Center |
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SCORE "Counselors to America's Small Business" |
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Small Business and Self-Employed One-Stop Resource |
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Small Business Service | Home |
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Small Business Development Corporation |
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