If you've been thinking about selling your business, the new year presents a fresh start to take action. Between getting your financials together, finding and screening buyers, and deciding on a price, selling your business can take more time than is ideal.
The BusinessesForSale.com global broker survey showed that 32 percent of brokers claimed it took an average of one year to sell a business and 11.3 percent claimed it took an average of 18 months. If that's longer than your timeline allows or you want to get your business off your hands as soon as possible, the following guidelines are right for you. Here is what you need to do to sell your business by Labor Day of 2019.
1. Boost your sales now.
If your sales aren't already at a high point, do everything possible at the start of the new year to increase sales and expand your customer base. Buyers want to buy businesses when they're on an upswing, not when sales are low. This indicates to the buyer that the market for your products or services is substantial or growing and instills confidence that the business will be successful post-purchase. Whether it's by introducing a new product, expanding your services or increasing your marketing efforts, get your numbers in a good spot before seeking out prospective buyers.
It's also important during this time to diversify your customer base. It's common for small businesses to get a majority of their revenue from a few returning customers. However, if a prospective buyer notices that a high percentage of your revenue comes from one or two customers, they'll worry that revenue will drop significantly after transitioning ownership. Even though you're actively working to sell the business, expanding into new markets before selling can encourage more buyers and ultimately a higher selling price.
2. Get a professional valuation.
When trying to sell your business, evaluating its worth and answering prospective buyers' questions can take up significant time. To expedite this process and ensure a reasonable asking price, it's important to get a professional valuation. A professional valuation will cover all important items that you may or may not have considered. By taking competition, finances and market health into account, a professional valuation will ensure a reasonable asking price, which will also help sell the business faster. After all, nothing turns buyers away like an unfairly high asking price.
When getting your business valuation, you should also receive a business summary. This document will outline all the factors that went into your asking price and streamline the answers to buyers' likely questions, which could otherwise slow down the process.
3. Hire a broker.
Finding, screening and negotiating with prospective buyers takes up the most time during a business sale. As a small business owner, you may not have the time to expertly navigate this network of buyers and accurately advocate for your business.
That's why a business broker is one of the best investments you can make while trying to sell your business. Not only do brokers know how to find qualified buyers quickly, they are experts at negotiating an asking price in your favor. They can do in weeks or months what may take you years to do. If selling your business in a short timeframe is truly important to you, a business broker is well worth the money.
4. Advertise aggressively.
While your broker will help you track down qualified leads, advertising that your business is up for sale elsewhere can give you the needed boost to close a sale within nine months. Advertise your business on websites like BusinessesForSale.com to get your listing in front of thousands of interested buyers. Advertise in trade publications or magazines relevant to your industry, and show up to local networking events to meet people who may be interested in your business. By getting your message in front of people on several platforms, you'll be sure to quickly capture the interest of several serious buyers.
Selling your business in under nine months may be intimidating, but it's possible with the right strategies and resources. Relying on professionals to handle the time-consuming aspects of selling your business and advertising aggressively will ensure that the right buyers are seeing your business.