The purchase and sale of a business is, for most people, the largest single financial transaction they will ever complete. The seller is frequently passing on to a stranger the result of his or her life’s work, and usually expects the proceeds of the sale to take care of retirement or to fund some other endeavor.
The buyer, on the other hand, is usually investing a substantial part of his liquid assets, and frequently is obligating himself to substantial loans to the seller, a financial institution, or both.
Therefore, it is not surprising that buyers and sellers are nervous in this high stakes transaction in which many of them have little or no experience.
In this situation, our best advice is rely on the services of a professional. Acquisitions Unlimited has the experience and proven results. Most importantly, the good judgment and common sense that made you a successful businessperson will see you successfully through the sale of your business.
In order to ensure that the sale of your business goes as smoothly as possible, we would like to share with you some of the dos and don’ts of selling a business that we have learned through experience. Ignoring these tips may cause anything from minor problems to the failure of a business to sell. The sale of your business will go much more quickly, smoothly and successfully if you keep these points in mind.
The following list is not in order of importance. In any given transaction, one or more of them can fit your personal situation.
- Do be flexible and keep an open mind. Look at the whole picture. Selling a business should not be a battle of wills. A little flexibility can make the deal.
- Don’t surprise anyone with undisclosed problems. Surprises kill deals. All businesses have problems. Transparency is important.
- Do continue to operate your business as if it were not for sale. You owe it to your employees, your customers, and most of all to yourself, to continue to purchase needed equipment and inventory, seek out new customers, etc.
- Don’t try too hard to impress a prospective Buyer. Just be yourself. Allow the buyer to imagine himself running the business after you have departed.
- Do be careful what you say to a prospective Buyer. Do not discuss the purchase price, down payment, etc. You do not want to negotiate a sale prematurely.
- Do minimize your exposure to a prospective buyer. Remember the buyer does not have the right to work in the business prior to the closing to see if he likes it. You have nothing to gain and potentially everything to lose.
- Don’t tell your employees the business is for sale. People fear the unknown. A key employee may look for another job, or accept an offer he may otherwise have turned down if he finds out the business is for sale. The right time to tell the employees is after the closing.
- Do beware of “Seller’s Remorse.” You should know in advance that there is a good chance that prior to closing you will wonder if you are doing the right thing. Remember your original reason for selling: retirement, travel, new ventures, etc.
- Do try to close the sale as soon as possible. The longer the period between an accepted Offer to Purchase and the closing, the more chances there are for things to go wrong.
- Do use the services of Acquisitions Unlimited or your advisor as much as possible. We have many years of experience negotiating the sale of businesses, arranging financing, transferring distributor agreements, renegotiating leases, etc. You hired us to assist you in this transaction. Take maximum advantage of our experience and expertise. Your time should be spent in continuing the successful operation of your business, not in worrying about every little detail of the transaction.
Most of these comments are just common sense. Some are a little less obvious. The cost of making a mistake in some of these areas can be hundreds of thousands or even millions of dollars, if it prevents the sale of your business. Under those circumstances, we feel that bringing these matters to your attention is warranted. We will be happy to discuss any of these points with you.
If you have any desire to sell your existing business, please contact us at 813-920-7880. There is no obligation.
At Acquisitions Unlimited, Inc., we have a great deal of respect for what goes in to starting a company, financing it, growing it and providing income to, not only your employees, but their families. We work hard to protect our sellers.
Running a business is not easy and we greatly respect our clients and support them in any possible way.
We are a Tampa company with many years of experience and we look forward to meeting you.