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Can I sell my business by myself? |
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Business For Sale by Owner
Can I sell my business by myself? Can a surgeon operate on himself? Can a homeowner sell his own home? Can an attorney defend himself in court?
Do you know how to sell your business? If not, there is a lot to learn. Any good business advisor or business broker will tell you that even after years of experience and dozens of successful transactions, they learn every day. Good advisors apply their learnings from past transactions to make future transactions even better. Do you have the time to learn the trade and invent the wheel? Can you afford to risk your livelihood and business, which may be your single largest investment and personal asset? Could you weather litigation or business interruptions if things go wrong? If you decide to go it alone, you should still try to find an educated and experienced sounding board. Just as anywhere else in life, two heads can be better than one. You may need technical advice, or just someone to bounce off ideas. You may need someone else to play the good cop or bad cop in negotiations. Who will that be, and are they up to the challenge? One of the major risks in selling your business is that in getting out the word to prospective buyers, it could also get out to the wrong people and cause problems. What if the sale takes awhile, or does not go through? What will your customers think if they find out that you are selling? They might remain loyal, or patronize your competitors instead. Would your best employees stick around if they felt threatened by a change in ownership? If your suppliers find out, will they still offer you the same credit and terms? Would your competitors be supportive, or fuel rumor mills and circle like vultures? Do you understand business buyers? They are a different breed. Some are sophisticated and may try to take advantage of you. But most are new at this game, just like you, and susceptible to making mistakes and having second thoughts. Will you have the time and tools to screen dozens and dozens of tire kickers? How will you qualify them? It will be important to ensure that unqualified buyers do not examine your business details and waste your time. Think about how you will keep buyers and their inquiries away from your customers and employees. Pricing a business is as critical as it is complex. You do not want to price so high that you receive little response from your marketing dollars, but so low that you give the business away without receiving fair value. This is not like pricing a house, where you just set the price a bit above a similar home that sold down the street. Records of business sale prices are few and far between. A professional would price a business based upon a careful analysis of the business and its financial performance. Are you up to the task? The better your business is running, the more that it is worth. If you are selling your business yourself, you must make sure that the sale process does not distract you from running your business. There would be nothing worse than finding a good buyer who changes his mind because your business has suffered during the selling process. Marketing choices will strongly influence both your costs and sale proceeds. If choose to sell your business yourself, you will not have access to a buyer database as would a business broker. How else will you market your business to buyers? First, try to visualize the various types of buyers who might want your business. Then craft marketing messages and materials that will inspire them to call you. Place advertisements in media likely to reach these buyers. Often buyers can be be reached through business brokerage websites. But some websites are better than others, and some work better for certain types of businesses. Since many prospective buyers do not monitor these websites, you should add other media to get the best exposure and best price for your business. Consider advertising in newspapers, trade publications and direct mail. Are you ready to represent yourself in negotiations with buyers and/or their representatives? Negotiating is a skill that can be learned. To be a good negotiator, you must understand what can be negotiated, aside from the sale price. Again, it helps to understand buyers and their motivations. Although price will be important to buyers, they may also be concerned with other aspects of the business sale, such as the financing terms, training and non-compete agreements. A good negotiator knows that almost everything is negotiable. Selling a business is a complex legal process with significant tax implications. Make sure that you do not share confidential information to anyone that has not signed a proper confidentiality agreement. Will this be an asset or stock sale? The buyer and seller need to understand the implications of each option. The purchase contract must be tried and tested, and tailored to local laws. The buyer and seller must disclose material facts to each other. Business advisors often have very good forms for these tasks, which may be hard for business owners to come by. How will buyer and seller get through the due diligence process, so that both are comfortable in moving forward, yet the process does not drag out for too long? Be sure to use a good escrow company, with an escrow officer who specializes in business sales. Business escrows are quite different than real estate escrows. Make sure that you understand the tax implications as well. Buyers and sellers cannot afford to make mistakes in the legal and taxation aspects of a business sale. After considering all of this, are you really saving anything by selling your own business? How much are you willing to spend, in direct marketing costs, your own time, and opportunity costs? In return, are you getting top dollar for your business? You may find it cheaper and easier to hire a professional business advisor. Professional advice can be cheap insurance.
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CLIENT TESTIMONIALS “I was happy with my experience with [BestSoCal]. Very professional and willing to help when the time came. Very responsive and hands on, not like my other experiences with agents and brokers. Very appreciated.” Todd Uyesugi, Seller “[BestSoCal] has handled the sale in the most professional and complete manner possible. I am very pleased with the experience.” Matt Ouwerkerk, Buyer “(The landlord) was difficult, but with Alan’s patience it all worked out for the best! Lino did an excellent job with customer service, always polite! Thanks!!” Rich & Trish Lindsay, Sellers “Alan was very helpful. Always returned our phone calls (not everyone does). He made us feel at ease, and found us the perfect business! We were looking for about a year. He made this a great experience. A million thank yous!” Debbie Rosetti-Colacion, Buyer “I am writing this note to express my extreme satisfaction with the way the sale of my restaurant was handled by Elizabeth Rebufat of [BestSoCal]. It was an amazing accomplishment considering the time of year and the type of business it is. Being the middle of November, I didn’t expect it to be listed and sold within 3 weeks, truly a tribute to the diligence of the agent and the great marketing skills of the brokerage. Excellent negotiating skills kept this in escrow, and kept the buyers motivated to purchase this business. It made the whole transaction less stressful for me. I am so glad I listed with Elizabeth, as I have found a new friend, and would absolutely do business with her and her broker again.” Jason Reavis, Seller “You guys made everything very simple, and I never once felt that Elizabeth was biased toward the seller. I like how you did comparisons for us. You went out of your way to find industry information for us. Surprisingly, I bought a business I never would’ve considered because Elizabeth was able to assess our needs.” Omar Toma, Buyer “Absolutely superb! Highest recommendations! Extremely professional!” Marty Johnson, Seller “Elizabeth kept in contact throughout the entire process and always answered any questions I had. She made me feel very comfortable during the whole experience. Great service!” James Taylor, Buyer “Everyone, from Lino to Sylvia to Alan was very helpful and professional!” Jeff Linder, Seller “Good, professional, efficient service.” Jeff Bower, Buyer “I want to thank [BestSoCal] for your professional services provided in selling my business. Special thanks to Randy Neyland and Jaime Gomez. You guys are special. I couldn’t do it without you. Again, I commend your services and thank you very much.” Sal Garcia, Seller “…[BestSoCal] have been helpful and professional. We are satisfied with their performance. We would also like to continue to do business with them in the future. Randy Neyland was nice and great. We are happy and are ready to open. Keep up the good work.” Omar Romero & Enrique Velazquez, Buyers “Excellent Rep. Always returns call very promptly. Never left me waiting. Always seems to keep client’s best interest first. A true pleasure to work with.” Jerry Thibodeau, Seller “Outstanding customer service. Easy, smooth transaction. Clear explanations; good understanding. Excellent marketing presentation.” Joseph Zeeb, Buyer “Incredible service from Alan. This was a tough sell and I’ll be grateful to [BestSoCal] forever!” Tran Tracy, Seller “Customer service from Alan Lippincott went above and beyond the call of duty. Alan was consistently supportive; professionally business focused during a very difficult settlement; and with a cheerful spirit. I highly recommend Alan as a business broker and would definitely use his services again.” Carol Hartman, Buyer “Outstanding organization, great teamwork. This was money well spent, and I frankly couldn’t have asked for anyone better than Elizabeth, and there was nothing I would have changed about the way she handled everything – exceptional!” Stefano Riznyk, Seller “I was satisfied with doing business with Lucky Team Escrow, and would recommend [BestSoCal] to anyone.” Henry Coronado, Seller “We appreciate everything you have done for us. We are really happy about it! Jaime, Alan, and Randy, we appreciate all of you. We appreciate…Carol at Lucky Team Escrow who helped us a lot. Thank you all!” Juan Ambriz & Laura Padilla, Buyers “Our experience working with you has been extremely good. You made the whole transaction completely painless. You guys showed a very high level of professionalism and were very patient when things did not go completely according to plan. You actually helped us bring everything back on track to close the transaction in a timely manner.” Jatinder Singh, Buyer “Elizabeth is a “breath of fresh air,” and it made my job so easy!” Carol Jones, Certified Senior Escrow Officer “[BestSoCal] did an exceptional, professional performance of all duties as commercial real estate representatives. I would highly recommend their service to colleagues without hesitation.” Olva Jang, Seller “This transaction went quite smoothly. Alan stayed on top of the process and made sure everything went as planned.” Raili Classen, Seller “It was a great experience! Thank you Alan for helping us with this. I’m very happy and we are thankful for all your hard work. You ROCK!” Karen Abdul, Buyer “ [BestSoCal], made the whole process of selling my business as easy as possible. I feel confident that all the legal steps have been taken and I can sit back and enjoy retirement. I would recommend this service to my friends.” Mick Ofield, Seller “Thank you for all your efforts! As a point of memorialization, without your help, I would have overpaid the purchase price by approximately $1,000,000!! You have been very professional with much patience! Thank you! ” Steve Berggren, Seller “I was very happy with Alan’s work, and when we met him he was on top calling, informing us in everything. All I can say is that we were happy with his service.” Raul Rizo, Buyer “Excellent service. Prompt response on each and every issue.” Alex Friedland, Seller “I would recommend Joleen to anyone who lists with [BestSoCal].” Alice Billman, Seller “Joleen made it happen! Kind & considerate, helpful! Alan gets things handled! Thanks very much!” Debbie Drew, Buyer “Alan was wonderful to work with, he made the process very easy for us. We would definitely work with your company and Alan again. Thank you for a well handled, smooth experience! Spienello Deli Inc., Seller “The service from Alan was the best!” Santiago Escobar & Jose Vidal Escobar, Buyers “Thank you for everything. I really appreciate your great endeavor to help me.” Tristan Parque, Seller “It took longer than expected, but Elizabeth was very patient and made everything finish smoothly…” Young Choi, Buyer “Alan showed the upmost in professionalism while carrying my sale from marketing to close. I would not only recommend him, but I would use him again.” Xtreme Autosports, LLC, Seller “Alan was very helpful with every step of the purchasing process. He was always available and answered all questions and concerns promptly.” John Solitare, Buyer |
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