Three Key Reasons Why a Business May Not Sale

Online, January 17, 2011 (Newswire.com) - Business owners attempting to sell their own business often encounter many obstacles and pitfalls including

1. Failure to properly prepare their business for sale

No matter how large or small the business is, if the owner wants the best possible price under the most favorable terms, a comprehensive selling or exit plan is paramount. Sellers need to be clear in their motive for selling. An exit strategy should include; how to identify the universe of buyers, the necessary framework to preserve confidentiality, maintaining or growing the business while in the process, working with buyers, asset control, due diligence, financing, facilities maintenance, selling memorandum and of course financial documentation and supporting documentation necessary to demonstrate the viability of the business.

2. Failure to consult a professional business broker

It takes an aggressive marketing program to find potential business buyers. Serious qualified buyers turn to experts for assistance in business acquisitions. Marketing for business buyers must be a 24-hour a day, 365 day per year process in order to bring to the table multiple qualified buyers who are genuinely interested in the acquisition process. The most important component for a successful transaction is confidentiality and maintaining normal business operations.

3. A Business must be properly valued and priced to sell in a competitive market.

Many factors such as marketplace, economies, productivity, profit, demographics and government policy can greatly impact the value of a business. Valuation is used by financial market participants to determine the price they are willing to pay or the price they are willing to receive to consummate the sale of a business. What your business is worth today depends on three factors: 1) how much cash it generates today; 2) expected growth in cash in the foreseeable future; and 3) the return buyers require on their investment in your business. Knowing the value of a business and understanding it is critical to maximizing your investment, whether buying or selling a business. Once you have made the decision to sell your business, setting a list price that is too high may disenchant away buyers and you may never sell your business. Conversely, setting a list price that is too low, may be cheating you out of a justified profit deserving of you the skill, endurance, and expertise injected into your business.