A business for sale by owner is probably one of the most difficult things to navigate. Small businesses are naturally used to aggressive guerrilla marketing tactics and bootstrapping, so they are accustomed to having the word on every available surface and signifying every purchase with stickers, flyers, or signs at all sorts of locations. This is no longer a suitable mode of advertising for most sellers. The Internet has taken all of the market share away from the small business seller. This is now a time for privacy and confidentiality. A business for sale by owner is one that is generally considered to be unsolicited and that, because of this, any contact, whether business-to-business or business-to-consumer, should be done with caution and under the strictest of circumstances.
Businesses for sale by owners are not typically advertised in conventional print media. Most newspapers have strict guidelines about whom they will publish ads for and how much exposure they will give to businesses for sale by owners. There are also very few places online where business owners to advertise their businesses. It is important to make sure that the potential business owners you have contacted are on the acceptable advertising list of websites.
One way to make the sale more lucrative is to raise the sale price. The multiplier method of business valuation takes into consideration the fact that the seller is selling a used less valuable asset than the outstanding cash balance on hand. In most cases, there is some tangible worth to be gained in a business for sale by owner that can be raised by an additional amount. This is based on the assumption that the business will generate an income sufficient to repay the seller’s debts and to retain some liquid capital for growth purposes. This can often be enough to justify a higher price.
Potential buyers want to know what a business deal is worth today. With cash sales, it is often possible for sellers to raise the asking price without providing any tangible assets for sale. This makes it essential that sellers provide details about the value of their business and the cash they are offering.
Many businesses that are being sold are sold on cash for cash basis. In this type of sale, there will usually be no profit and very low levels of inventory turnover. As business owners, you must convince buyers that the amount of money they are paying is worthy of their business’s expected future profits. Sellers should only provide details of the past performance of their companies if they are confident that the buyer is capable of funding the business’s operations after the sale.
When looking for small-business for sale by owner, potential buyers are impressed by a seller’s ability to draw suppliers and vendors quickly and efficiently. However, convincing buyers that your business has excellent cash flow and that the cash is sufficient to meet expenses and satisfy expenses is a much more difficult task. Sellers can improve their standing with suppliers and vendors by focusing on building long-term relationships instead of just trying to sell them on the strength of their short-term sales. To do so, sellers should consider having a few “must-haves” in their businesses. These items include state-of-the-art equipment and supplies, a business-appropriate location, staff members that have experience and skills that are needed to run your business, and a commitment to ongoing improvements that will allow you to remain competitive. A buyer’s commitment to building a profitable business is a great indicator of how serious the seller is about seeking to sell his or her small-business.
Because the number of small businesses for sale continues to grow, many sellers are turning to the Internet to find potential buyers. One way to improve the chances of success when selling your small business is to have an agent who is familiar with how to communicate effectively online. A potential buyer may post questions on online discussion forums and blog sites. You may also want to use sites such as LinkedIn and Indeed to showcase your professional history and expertise. If you have employees who speak English as a first language, you’re more likely to attract a buyer who is able to conduct business in English.
A final consideration for how to sell your small business is to determine which buyers are most likely to be interested in your businesses. In general, buyers are more likely to purchase businesses located in high-income geographic areas, but the specific location of the buyer may change depending upon the type of business for sale and the seller’s strategy for attracting buyers. Potential buyers who purchase a seller’s businesses may need to be convinced of the value of the company before purchasing it, which is why it’s important to have a broker that has experience representing businesses in both difficult and lucrative economic environments.