How to Sell a Business

How to sell a business? That simple question explodes with so many variables. Do you want to sell to family or a friend? Do you want to sell today or in a month or sometime 'soon' with no firm date on when 'soon' will start or finish. What about the question that relates to 'how to sell a business' and that is 'how much do you expect or want for your business?' Do you want all cash up front or are you willing to carry some of the finance? So that simple question, 'how to sell a business' all of a sudden comes with a few more complications. The answer to the question of 'how to sell a business' reminds me of that expression, 'it is like peeling an onion.'

If I was to answer the question, how to sell a business using the skills and techniques I have learned from being a business broker I would answer as follows.

The most important first step is to understand the motivation of the seller and specifically their timetable including when they want to start to sell their business. Selling a business is not a quick task that can be done in a week or two. It generally takes between 6 to 12 months to sell a business with the average sale time 8 months, if it sells. The most surprising piece of data is that only 25% of businesses actually sell, that is, to put it bluntly, 75% of businesses close down.

Once the motivation and timeline of the seller is clear the next most important step is to get the seller and the business ready for sale. Too many sellers approach the selling of their business very timidly with no clear direction and not embracing the process. Selling a business is not an easy journey as it touches a myriad of decisions that are part of owning and operating a business. This includes the main decision making areas around operations, finance, accounting as well as management and other sensitive areas of the business but also the raw emotions of the seller/owner including their fear of leaving the business, whether customers will continue to come, the employees will stay and if the legacy of the business will continue and more.

Once there is clarity on the above two steps, it is now time to drill down into the details of the business and understand specifically what is for sale. Too many sellers go to market to sell the business but do not have the necessary documents ready and just as importantly, fail to get a professional review to make sure what the documents say are up to date and accurate. There is an adage in the business brokering industry that 'time kills deals.' Buyers do not like surprises or matters outside their control. Initially they may have some patience but waiting too long creates a fear they are missing out on other opportunities or this is a sign that this isn't the right business for them and that they should move on and look at other opportunities. The window of time a buyer is prepared to look and buy a business is very small so even a slight delay can make the difference between buying and not buying the business.

When I am selling a business, at a minimum I get from the seller or put together myself the following set of documents. Each transaction is different so there may be other documents to organize but a basic set of documents includes the last 3 years Profit and Loss Statements, Tax Returns and Balance Sheets. It also includes a copy of the lease, a list of fixtures, furniture and equipment, and a Sellers Disclosure statement that explains to a buyer the conditions the business needs to successfully operate including regulatory requirements such as licenses, permits and other critical information they need to know or take to ensure the business will operate legally under a new owner.

Part of my approach is also to create two important documents. The first is a Blind Executive Summary of the business that is sent to an inquiring buyer so they get a high level overview of the business and decide if they wish to keep moving forward with their inquiry to buy the business. If the buyer wants more information, at that point they complete and sign a Non Disclosure Agreement and I then present a Confidential Business Review or Confidential Business Summary which has more in depth and commercially sensitive information about the business. With the above in place, after reviewing these documents and speaking with the seller they should be able to make an offer.

Once the offer is negotiated and accepted by both parties, the transaction moves into due diligence where the buyer is available to verify and validate the representations of the seller and get access to all the sensitive documents they need that I have on a secure password protected website.

This part of the transaction also requires keeping things moving forward with items such as obtaining a new lease or assigning the current lease. Additionally, if the buyer is organizing third party finance such as an SBA loan, the buyer also needs to stay on top of this process to prevent the deal collapsing.

The final step is to move into escrow so monies payable to the various parties in or connected to the transaction are handled and the legal title for the business and its assets correctly change hands.

Selling a business is not a sprint and at different times in the transaction can appear more like a marathon. Another piece that I have begun to accept as a truism is that most transactions die at least three times before they close. That is, at different points in the transaction the buyer gets cold feet or it's the sellers turn because things are not going the way each part expects. It is what it is.

Andrew is a 5-time business owner that helps entrepreneurs exit or enter business ownership. His services include helping owners sell and/or buyers purchase an existing business or consult on purchasing a franchise. He also provides certified machinery and equipment appraisals and business valuations.

How To Choose What Home Business To Start

There are a lot of people who are interested in starting a home business. You do not have to choose just one idea, as a matter of fact, it is better to have various streams of income.

Here at home business prospects, we are always looking for fresh ideas and ways to support your home business.

When making the decision to start a home business, it's quite possible that you are faced with two or more choices of possible home businesses to start. However, there are a few important factors you can think about before starting any home business.

4 Factors To Assist You When Making The Decision:

1. Your Passion.

What is your passion? Sometimes the thing that you love doing most could be the door to your destiny. What makes you look forward to a new day? If these are your reasons for starting and building your home business, chances are that you would persist doing the business even when the going gets tough. That's why it is important to work on something you love it makes you feel comfortable.

2. The Product's Demand.

Focus on a niche where demand is well-built to guarantee the profitability of your home business. Find a market with products that sell well and pay well. Keep in mind that when the demand for the product is high, the better for your business.

3. The Product's Profitability.

Select a home business that is liable to earn a larger percentage of profits per sale. Whatever the home business you decide on, you can start by charging fair prices and quality products. With excellent customer service, your customers will remain loyal, then consider raising prices slightly, hence making profits. As a home business owner, the higher the traffic, the higher the profits and so the better for your business.

4. Compensation

There are a few questions that you must ask yourself:

i) what return do you look forward to from your home business

ii) How long will it take before you start earning

iii) Is it a long term or a short term investment

14 Lessons You Should Learn As A Home Business Owner

At times starting a home business can be challenging. Like any other business, it requires hard work to succeed.

Here are lessons that can help you to start your own home based business:

Believe and Dream big. There is magic in dreaming big. The most successful entrepreneurs dream big. Believe in yourself and in your home business idea. Dream of how your home business will not only transform your life, but change the world. Work it until it is done right.

Dream and Act. Dreaming is one thing and acting on that dream is another thing. Make sure that you are working every day to achieve your dream. If you dream and you do not act then that would most likely be a wasted dream.

Goals. You need to set clear goals for your business. Where do you see your business in a year or in three years - how do you plan to reach it?

Believe in what you are doing. Believe what your business can do, and how it can transform the lives of your target market. BELIEVE you can succeed and you WILL.

Failing is a staircase to success. No matter how hard you try to do what you think is best, mistakes will always come along. The good thing is that you learn from your mistakes and you can change your idea, or use a different approach altogether. Mistakes are simple steps in the journey to success. Success doesn't demand a price; every step forward pays a dividend.

To be a success you have to be informed. Every result you get is tied to the level of information you posses. Wonderful profiting is a result of quality information. Get informed through books, journals, web and many more.

Understand your customers. Customers are the backbone of your business. Treat them with respect. Your customers' opinions will help you in knowing what's working and what's not working in your business. Responding to their queries makes them feel important.

Get ready to take chances. Entrepreneurship comes along with many challenges. Do not be afraid to take chances. It feels good to realize that you've accomplished something that you never expected you could. Believe you can surpass and you will go beyond.

Networking. This is fundamental, especially when you are just getting started. You just never know who you'll meet and what impact they may have on your business. Involve yourself in Forums and social media sites.

Time. Be your own boss. Time is precious, discard the habit of procrastination. Make sure you accomplish the most important tasks of the day. Thus allowing you some free time to rest.

Accept critics. You can not give pleasure to everybody, so be prepared to receive criticisms. Accept criticisms and always keep an open mind. Use all feedback to your advantage.

Research your competitors. Research products that are similar to yours and then make every effort to make yours better.

Get ready to sacrifice. Entrepreneurship requires full commitment. Working on a home business may mean personal sacrifices on your part - e.g. less activities with friends, less sleep.

Avoid dream killers. You can probably have a mentor. Only focus on people who will encourage you and inspire you to go forward.

6 Ways To Shun Away From Home Business Scams

Job seekers need to be really careful when searching for home businesses. Don't allow yourself to get fooled by work at home scams... Be smart!!

NEVER pay for the opportunity to work! No genuine company charges employees a fee for a job. However, with home business opportunity sometimes you will be required to pay someone to coach you how to run your own home business. You may also need start-up costs to cover investments, materials, franchises, or other items.

Get rich quick. You will never find free rides in this life. Home business is just like any other business - it requires hard work, good products or services, and also time to make profit. If it sounds too good to be true, it is.

Do not show desperation. Even if you are in financial difficulties, act calmly and professionally, just like you would in a real world job search. Don't post messages on forums saying that you are desperate to find work from home. Desperation brings all of the scammers out of the woodwork, and you'll be flooded with false offers.

Practice patience. Be patient and be ready to spend a lot of time weeding through scams and junk listings to get to legit openings.

High-pressure tactics. Scammers love using pressure tactics to suck you in. If you're given a time-limited offer, more often than not there is always a reason. Do not be under pressure to do anything, so that you don't loose money to schemes that never materialize.

Your banking information is personal. If any company asks you to verify information in an email it is a scam. You should only accept online payments through systems like PayPal or Alertpay. This way your personal account information is not in the hands of an unfamiliar party. Incase of a phone call hang up and call the company directly so you know you are actually talking to a company representative.

Can You Truly Succeed With an Online Business

One in every thousand online businesses fail. The statistics are higher than the failure rate of offline businesses, leaving experts to wonder if it is actually possible to create a successful internet based business. Like any business model, unless you follow a plan and success driven formula, then regardless of whether your business is online or offline, you are unlikely to make it work. Every business requires dedication, time and patience, however an online business also requires a whole set of additional skills that were unheard of 20 years ago.

When a new business started up back in the eighties, there were a range of skills required to optimise the chances of success. However a local business was unlikely to face competition from overseas, and many industry types such as travel agencies and record stores would thrive due to the absence of the internet. Manufacturing firms in Australia and America were far more advanced (and a cheaper option) than those in Asia, and parallel importing was not a term ever used in business.

Fast forward to 2012, and a rising number of industries are no longer viable business options, or simply do not exist outside of the online realm. However, the growth of online enterprise has created an entirely new set of problems. And that is the massive competition resulting from the rise and rise of people starting online and internet based companies. Where once dot com enterprises were the thriving new kids on the block, now the internet is a battlefield of businesses competing for search engine rankings, keyword domination and social media followings, with many unable to keep up and thus shutting down before the momentum ever has a chance to kick off.

Why are so many of these online businesses failing? Is it at all possible to grow a successful internet based enterprise? If so, then how is it done?

Yes, it is possible to build a successful online business, yet numerous business owners fail to either research their target market prior to launching, or simply do not have the budget and skills to grow a formidable enterprise.

A major problem is how easy it is to set up an internet based business at very little cost. People get excited. They can build their very own website for a low monthly fee, create social network accounts for free, find numerous free tools and tips to increase the profile of their business, so therefore are fooled into thinking anyone can start an online business and immediately earn a weekly income equivalent to an employee wage. These prospective business owners are convinced an online business is great idea that will save them a fortune so go for it. That is precisely the mindset that induces failure.

What 70% of business owners fail to realise, is that growing a successful online business is just as expensive as starting a franchise or corner store, the financial outlay is simply distributed to different areas.

True, an internet based business may not have shop or office rent. You may not incur costs for store and corporate fit outs. You may not even require staff or assistance so can save on people costs. Hey, you don't even need office attire, you can work in your lazy clothes with your clients and customers none the wiser.

However, how will your customers find you? If you want to be found easily to generate sales, then you need to pay for it. And to be honest, for search engine marketing to be incredibly successful you are going to be outlaying big dollars. There goes the money you saved on rent!

How about the time you spend optimising your website, writing content, creating blogs, updating social network pages? Time you are not being paid for. Unpaid hours.

And what about your competition? How will you beat them? A stand alone health store in a shopping mall is unlikely to have forty other stores right next door, competing for trade. Yet, type in "Health Store'' to any search engine and watch hundred of pages appear. This is your direct competition. To beat this competition, guess what, you have to pay for the privilege.

Now, many business owners that I deal with, are under the assumption that they can simply market their products or services on any social network and this will not only be cost saving but will deliver instant success. Wake up and smell the roses, no business will ever achieve success online by relying on one marketing technique to grow their business, especially depending on social networks to generate sales.

All of the above sounds rather negative and glum, so back to our original question. Is it at all possible to grow a successful online business? Yes, it is, and it can be done, but with a lot of hard work and persistence. There must be a solid business plan, funds to market the business, and the knowledge to promote the business smartly and wisely online. For any internet business to succeed, the business owner must realise an internet business is not a cheap way out. To attain success, as with any business, you require money, business accumen and the necessary skills. To think otherwise will guarantee failure.