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3 Things Buyers Look For: What to Expect when Selling a Business

When you’re selling a business, it can be all too easy to get tied up in the process. After all, selling a business requires preparation, gathering info for the valuation, listing and working with the buyer through due diligence . Instead of getting bogged down by the to-dos, remember one thing: you cannot sell a business without a buyer. In order to attract the right buyer for your business, it’s important to focus on the key things buyers are looking for. Read on for what to expect when selling a business.

1. Current Market Situation

Woman in suit at start lineSMFirst and foremost, potential buyers will be looking at the current market situation of your business. Buyers looking to purchase an existing business want to know ahead of time if they’ll be participating in a hand-off or a recovery mission.

Every business needs customers, and having a consistent customer base is appealing to potential buyers. It’s worth noting that when you’re looking to sell a business, customers who are loyal to your business, product, or service are extremely valuable.

The other major determining factor of your current market situation is your competition. First, examine your direct competitors, those who provide a comparable product or service. Become clear not only about what sets you apart, but also how the competitive side of your industry functions.

2. Profitability

Although people get into business for any number of reasons, profitability is almost always right at the top. The promise of profitability needs to be a concrete one, that’s supported by proper documentation. For instance, organizing your annual income in terms of seasonality can provide potential sellers with a snapshot of typical profitability against industry trends. It can also lay out the annual lulls and crunch times of your given industry.

Beyond income and trend analysis, potential buyers will be interested in your tax returns. When it comes to budget balancing, recording a profit translates into paying more in taxes. But, when you’re selling a business, few things are as appealing as tax returns reporting a surplus.   

3. Growth Potential

Buyers will also be looking at the growth potential of your business. Some businesses grow, some shrink, and some stay relatively the same size. Determining whether your business is structured for maintenance or growth will depend on your current situation.

Begin by assessing the scalability of your business. Is the organization structured for growth or maintenance? How would the current procedures, processes, and people respond to an organizational growth spurt? Then, look to the physical requirements of growth. Can the organization’s current space accommodate growth, or is space already maximized? Similarly, is there appropriate real estate to promote growth or expansion?

What to Expect when Selling a Business

Preparing your business for sale is a lot more than sticking a “For Sale” sign in the window and waiting for the offers to roll in. Think about your current business as if you were an interested buyer. Then, think about what information would be the most helpful. In order to attract an appropriate buyer, look at your business from a buyer’s perspective.  

 

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Ten Steps To Selling Your Busines

Our Sellers except us to achieve the highest and best offer for their business while taking the least amount of their time away from it as possible. That is because the absolute best use of their time is to continue to run and grow the company.  If revenue or profits begin to decline, buyers will walk away or decrease their offer. Transworld's philosophy can be summed up in a ten step, how-to strategy that culminates with the sale of a company. This proven method has been used to sell hundreds of businesses.  Here are the steps. Step1 Comprehensive Business Analysis and Feedback As your business broker, the first thing in our how-to strategy is to analyze your operation, finances, market potential and industry trends. We take that information and advise you on steps to prepare your business for sale, and  generate a business profile that represents your company in the most attractive way possible. Step2 Sale Structure We identify the best possible price range to sell your company. This is based on solid facts, the condition of the market, projected growth, sales potential and the sale of similar businesses within your industry. Transworld’s experts apply sophisticated, time-proven valuation techniques to ensure that your price is appropriate for the current market condition. The price must not be too high or too low. Yet, it must represent an attractive investment potential for the buyer. Step3 Confidentially Network The Business For Sale During the selling process, we utilize the latest technology to present your company to other business brokers and strategic buyers all over the world. This greatly multiplies the effort in your favor. With Transworld Business Advisors, you have literally thousands of industry professionals confidentially representing your company to buyers.   Step4 Confidentially Advertise To Buyers Our aggressive marketing program ensures your confidentiality and provides maximum exposure for your company. Your listing is placed in various industry databases, Internet sites, and publications which are constantly updated. We spend more money in advertising and marketing for buyers than anyone else in our industry. Step5 Control The Information Flow We organize all necessary documentation and release information only as needed. We use limited information when advertising to maintain confidentiality. Buyers are pre-qualified and required to execute a confidentiality agreement before receiving any sensitive business information. Step6 Create Competition For Your Company We attract thousands of buyers, creating competition for your business. Buyers are qualified for financial ability to meet the offer, and we engage you with only the most qualified buyers. Once you meet the best of the buyers, we urge them to prepare and present all offers. We can continue to engage potential buyers on your behalf as negotiation on an offer is in process and have another interested party ready to go should a buyer change their mind. Step7 We Negotiate For You To Achieve The Best Price Appropriate negotiation is crucial to achieving your best price and terms. We have the expertise to establish sound and resourceful negotiating techniques on your behalf. Transworld has trained all of its agents in the art of negotiating through curriculum that we have created specifically for our industry. Never negotiate without planning, expertise, or from a position of weakness. Step8 We Provide Exceptional Support To You Through The Due Diligence Process We take pride in our exceptional service. Only half of the job is finding the right buyer who will pay your price and meet your terms. The other half is getting that buyer to the closing table. We quarterback the deal, work with the accountants, lawyers, banks, landlords, and other third parties that could jeopardize the success of the transaction. We realize that you depend on us to guide you through the sale of your business. We make the transition simple and easy for you. We know when an opportunity for you may arise and are always there to take advantage of it. We also know when someone is trying to kill your deal or is being unreasonable and how to handle those situations. Step9 We Are There From Beginning To The Closing We help manage all administrative procedures, licenses, inventory counts and lease assignments that may be required. Transworld works closely with your advisors to ensure a smooth transition. Using the latest technology, we strive to be ready to work on your behalf to get the deal done! Step10 We Are There For The Transitional Phase And Beyond! Because we are in the business community, you may want to consult us from time to time after the sale. We will provide you with the assistance after closing. Transworld will always remain in your corner! Schedule Consultation Now

5 Tips For Keeping Your Business Sale Confidential

When selling your company, it is crucial for the health of the business and its future that the sale remain confidential. If your customers, vendors or employees learn it is for sale, it could have a negative impact on value.  Learning of a business sale may encourage customers to replace your product or service, employees to look for more secure employment, and vendors to demand payment of invoices.   If the value of your business is impacted, you will lose negotiating power with buyers and will not get the highest and best offer for it.  One way to protect the confidentiality during the sales process is to work with a business advisor, who will work on your behalf, use best practices, and allow you to continue to run your business.  Here are some tips we share with sellers on  keeping a sale confidential.

The SBA Will Pay Your New Business Loan For Six Months

Why You Should Buy That Business Now There are renewed benefits to using an SBA 7A Business loan to purchase a business.  But you  may have to act quickly to take advantage of it, because they money is expected to run out before the September deadline.  The Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (The Economic Aid Act) was signed in to law on December 27th, 2020.  Included in this legislation:

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