You want to sell your business for sale in such a way that does not tip off potential buyers, suppliers, lenders or employees. And without a doubt you do not want to let potential buyers know that your sale plans exist unless you are thinking of a specific competitor as an early buyer. However, sometimes you need to discuss the sale with family and close friends.
What is a good time to have this discussion? Many people feel that their best chance of selling their business is when the economy is in a bad place and there is less disposable income. If you think of what is happening with many large businesses right now, you will see that they are often holding onto their businesses for two reasons; one, that they have financial obligations to fulfill, and two, that they have a lot of competition. The first reason is less important than the second, but is still a reason to consider the sale marketplace. With less disposable income, businesses need to reduce costs. It is one of the reasons they are offering generous cashouts.
This brings us to the second reason: Many businesses will be more willing to settle in small packages than they would be willing to do if the market was more competitive. Business for sale by owner sellers are already feeling the pinch because of the bad economy. They are not getting the dollars they need just to keep the doors open. And some of them are being forced out of business because of the lack of capital they can obtain from banks and other funding sources. Business brokers can provide a third party who can act as a mediator to help those businesses obtain capital as needed.
Business for sale by owner sellers have a unique opportunity to secure additional financing while negotiating a fair price with their buyers. The buyers for these businesses have an incentive to settle for a lowball offer. That means that they will go for much less than what the business is really worth. That is where the broker comes in handy. As we mentioned previously, some businesses are being forced to seek financing from cash or credit facilities.
And buyers can get involved in internet business due diligence by visiting each potential buyer’s website. In this process, buyers can get a better feel for what the business is actually worth. They can also find out what is possible, based on information from the business owner. In order to conduct this due diligence, the business owners have to let it be known that they are interested in selling. Then they can focus on ways to attract buyers, rather than focusing on their current financial situation.
Buyers will also be motivated when they see that the seller has made every effort to keep them up to date on regular communications. There are many buyers out there who don’t even check websites anymore! But if a business can be kept up to date and maintain its current level of success, then it will sell much faster. Many businesses will actually increase their asking price based on how well they keep their buyers informed. And this is where having a buyer’s directory comes in handy.
Another important thing to consider is the sellers geographic area. Many of the best deals will come from businesses in more populated or urban locations. That is because homes in these areas are much more lucrative. These markets typically have a higher demand for more businesses and services. But even in the most affluent areas, you need to look beyond the immediate surrounding area to find viable business offerings.
The best way to view details about a business for sale is to contact the seller directly. If you contact the seller, make sure to ask questions about their business and their available financing options. You should also view the business as something that fits your current needs, which may not always be true. For example, if you do not currently own a truck or know how to use one, then purchasing a small business would not be an ideal choice. Contact the seller to find out what their financing options are and what their business offers in terms of profitability and your overall cash flow needs.