How Do I Prepare for the Sale?
Chapter 1 of my book “Hidden Wealth” The Secret to Getting Top Dollar for Your Business
wastes no time addressing how a business owner prepares themselves for the selling of their business, because when selling ones business you can’t be “half pregnant”. I share stories of what to do and what not to do. Having owned and sold dozens of my own businesses I can relate intimately what goes through a business owners mind before they begin the selling process. Check out chapter 1, because you won’t be disappointed on what you learn.
When is the Best Time to Sell?
This is a great question and one I get asked quite often. Believe it or not the best time to sell is when you don’t have to and the business is profitable. It is quite simple. If the business is doing well then it will sell for a higher valuation and bring the most value. If the business is doing poorly it will be harder to sell and will not command a high price. However, by preparing the business correctly one can command a higher price. For all of the details check out my book “Hidden Wealth” The Secret to Getting Top Dollar for Your Business “When is the Best Time to Sell Chapter 4.
How Do I Know What My Business is Worth?
We like to say that it is a combination of both art & science. The ‘science’ part of the equation is the numbers. By that I mean the profit and loss statements of the business and the cash flow. The ‘art’ portion of determining the value of a business takes into consideration the quality of the assets. What is the state of the industry the business is in? Where is the business located? Is there deferred maintenance? The list goes on to determine what a business is worth. For more information, check out my book “Hidden Wealth” The Secret to Getting Top Dollar for Your Business, “Know What You Are Selling” A Seller’s View of Valuation chapter 5.
HOW DO I KNOW I AM GETTING TOP DOLLAR?
One of the biggest mistakes business owners make is not knowing what their business is worth and moving blindly into the selling process. It is remarkable that most people know what their vehicles and real estate is worth, but have no idea what their business is worth. It is one of the easiest ways to leave sometimes millions of dollars on the table. In Chapter 5 of my book “Hidden Wealth” The Secret to Getting Top Dollar for Your Business, I dive into the details as to what you can do to ensure you don’t leave money on the table.
HOW DO I DEAL WITH FAMILY IN THE BUSINESS?
Boy, don’t I wished I had the silver bullet answer to this question. All families are different, but some things do remain the same and when transitioning from the patriarch and matriarch to the children it can get very dicey. I share stories of how other families have confronted this issue in Chapter 3 and in the conclusion of my book “Hidden Wealth” The Secret to Getting Top Dollar for Your Business. It helps to be prepared and learn from other peoples mistakes rather than making the mistakes yourself.
Where Do you Find a Buyer that Will Pay Top Dollar?
Ah the million dollar question. Finding a buyer is not hard to do. But finding the right buyer who can perform and get the job done and the transaction closed is another story, because business transactions are based on price and terms. If the price and terms cannot be agreed upon in the beginning of the transaction chances are things will not turn out good. In my book “Hidden Wealth” The Secret to Getting Top Dollar for Your Business, chapter 6 will give you the insight you need to ask the right questions to ask before it is too late.
How Long Does it Take to Sell a Business?
We like to say between 6 to 12 months, but a lot of this depends what kind of shape the business is in. Many factors go in to the selling timetable such as, where is the business located, can the business be relocated, what are the quality of the assets, what kind of industry is the business in, is the business trending upward or down.
Lots of different situations can create different timelines. In Chapter 8 of my book “Hidden Wealth” The Secret to Getting Top Dollar for Your Business I share stories of different scenarios on how long it took business owners to sell their business and how you can benefit from their experiences.
What is the Process When it Comes to Selling?
Believe it or not there is a process. And there is a check list for this to ensure you don’t miss anything. Even pilots who fly every day and know what they are doing use a checklist every time they get in their plane so they don’t miss anything before every take off and landing. To ensure you don’t miss anything we have included a comprehensive list of everything that will need to be reviewed in my book “Hidden Wealth” The Secret to Getting Top Dollar for Your Business, chapter 7.
What are some of the pitfalls I should be looking for as a Seller?
To begin with you may only sell your business one time in your life so you don’t have any room for error. Maybe you have sold a business in the past or some real estate or some vehicles, but nothing can prepare you for selling your business when you are dealing with a professional buyer. As we like to say “It isn’t a fair fight”
Having sold over 800 business I have encountered a lot of skullduggery and some crazy stuff. Below is a list of some common things a seller may encounter from a buyer, but to get the full list checkout my book “Hidden Wealth” The Secret to Getting Top Dollar for Your Business chapter 7.
- Claw Backs (offer one price then change later)
- Hold Backs (money held back for issues to be resolved after closing)
- Holdovers (seller to insure for 12-18 months for liabilities)
- Non-Competes (restrictive to future earnings)
- Slicing & Dicing (cherry-picking select assets)
- Due Diligence (proving what we are selling)