Selling A Raleigh Business? Don't Make This Mistake
My wife and I learned first hand of the difficulties associated with selling a business when my mother in law prepared to sell her thriving florist. After forty years of loving her work, her customers and her community it was time to finally retire. Coming to this decision was no simple task but the truth is – it was time.
My wife’s brothers and we all lived out of town so the prospect of us keeping the family business going was not an option. My mother in law attempted twice to sell her business. Her first experience was horrible (misleading business broker) but her second attempt at selling her business delivered the results that she desired.
This florist was much more than a business to my mother in law. It brought joy as she served people in some of life’s most joyous times (weddings, anniversaries, birthdays, etc) and some of life’s most difficult days (illnesses, funerals, etc). My wife’s parents were able to provide for their family, take vacations, buy a home, support missionaries, bless others and put some money back for retirement from their hard work in their business.
Selling a business isn’t a routine or simple business transaction. Ten years after selling their business they couldn’t be happier. They are well into retirement and their florist continues to flourish as the new owner continues to serve the community with beautiful flower arrangements, quality, and kindness.
How To Sell Your Raleigh Business
Besides retirement, there are many good reasons to sell your Raleigh business. Most experts will agree that the best time to sell your business is when it is growing and profitable. Once you’ve made up your mind to sell your business the next question is, “How do I sell my business?”
Over the next decade, 60% of U.S. business owners plan to sell their businesses. Baby-boomers are eyeing the selling of their businesses to fund their retirement and as a resulting sale preparation and exit strategy are high priorities.
The best way to sell your Raleigh Business is to know that selling your business is a process that takes time and expertise. Most business owners mistakenly underestimate the headaches, legal implications, financial preparations and time required to market their business.
Two important things need to be prioritized during the sale of any business. First, privacy needs to be protected at all costs, which makes it tough for the business owner to be driving the marketing. Secondly, the business has to continue to prosper and grow. Few buyers want to purchase a business that is in decline.
The Selling Process
If you want to sell your Raleigh business the following steps are part of the process. Securing a business broker, prepare financials, prepare prospectus, business valuation, listing, hundreds of inquiries, follow up with potential buyers, Letter of Intent, Due Diligence and Closing.
Your business advisor will bring a team including attorneys and accountants to help the seller and buyer walk through the purchase. It is estimated that close to 50% of deals fall apart during due diligence because the buyer gets cold feet. A key role that your business advisor will help sell your business is by educating the buyer and calming their nerves throughout the process.
It is incumbent that the business owner provides accurate and timely financials. When the buyer can’t get numbers or when they receive incomplete or inaccurate numbers then the buyer loses trust and becomes uninterested in completing the deal.
Remember, Remember, Remember- The deal is NOT complete when the LOI is signed. Make yourself available, provide good/honest information, be transparent and continue to be willing to negotiate. When real estate is involved make sure you are attentive to the inspection report and be prepared to fix discovered issues in a timely manner.
How Long Does It Take To Sell A Business
While there are no crystal balls that can predict the sell of your business we can look at the research.
How To Sell Your Business Quickly
80% of listed businesses do not sell for one primary reason, they are priced wrong. Many business owners that decide to sell their business will contact a few trusted friends or advisors (That have never sold a business) and they will bounce a few prices off of them. Many business advisors are fearful of walking away from business so they list inflated prices even when they know the business will not sell.
If you REALLY want to sell your Raleigh business, listen to your business advisor. A Transworld advisor has the support of 40 years of business sells and they will compare your business to thousands of business in your industry that have ACTUALLY SOLD. They apply research, years of experience and local knowledge to give you an accurate pricing picture.
If you want to sell your Raleigh business quick makes sure that you price your business correctly. A business is generally worth a multiple of the earnings. Do not make the mistake of believing that businesses are priced on revenue. Typically, your business will have a multiple of SDE or EBITDA to get your selling price. Your business broker will help you set a fair valuation.
There is so much more that goes into how you sell your Raleigh business but the aforementioned considerations should help any business owner begin the process a bit more informed. When you have a toothache to go to see a dentist. When you need help with your car you go see a mechanic. As important as the sell of your business is, we’d recommend that you see a professional business advisor. In the end, their knowledge and expertise will help you save money and get your business sold.