To the average business owner, there are a lot of preconceived notions about selling their business. Let’s break down the top 4 myths about what it takes to sell a business:
MYTH #1: “Selling a Business is Just Like Selling a House.”
Selling a business is an entirely different and much more challenging and complex process. While the average house can sell in couple months, a business sale can take from 6 to 12 months. When selling a house, you are selling a tangible asset that normally retains its value. In contrast, when selling a business, you are selling the potential of making profits, customer relationships, and skilled employees. Selling these intangibles is significantly harder than selling a house. Almost the entire process is different: from confidentially marketing the business to closing the transaction. The only shared characteristic is that a good business broker will also have a real estate license in the event that there is real estate involved in the sale transaction.
MYTH #2: “The Best Time to Sell is When I Feel Ready.”
Of course, you as the owner must be emotionally and mentally ready to sell your business. But when is the right time to do it? You must also evaluate the market and economic factors such as interest rates, unemployment, and industry consolidation. The optimal time to sell is when your business can secure the highest price. Know your industry and where it is headed in order to choose the ideal time to sell, bearing in mind that the process of selling the business itself can take a few months to a year.
MYTH #3: “I Know the Value of My Company.”
Some owners make the mistake of determining the value of their company solely based on how much money they want to make from the sale or from rumors that they have heard about other businesses that sold. It is always best to get a valuation from a professional. Business brokers can fairly analyze the value of your business based on the market it operates in.
MYTH #4: “I Can Sell It Myself Instead of Paying For a Broker.”
Some business owners fail to see the value of getting professional help. You could attempt to use your network of colleagues to find potential buyers, but you would lose confidentiality. If the news about you placing your business up for sale is revealed at the wrong time, you risk losing customers, employees, and promising credit terms that would all result in a lower selling price. Use a professional business broker to maximize your selling price and your cash at closing, all while minimizing your stress.
Call Gateway Mergers & Acquisitions now for a free, no-obligation pricing analysis at (972) 219-6961!