Selling Your Business
Selling your business isn’t like selling your house. For some business owners, it is years or decades of hard work, blood, sweat and tears invested to build this business. This might be your life work and you may have concerns about the best time to sell your business. You are faced with an uncertain economy, greedy competition and sophisticated buyers. Without the assistance of a business transfer professional, unprepared you must face them alone.
Business Brokers or as they are also called business transfer professionals, are experienced in the co-ordination of business transfers. This complex process has many intricate challenges that can easily derail many deals.
In fact, less than 50% of all small to medium sized businss sales arranged by the sellers without professional assistance result in transactional problems, dissatisfaction or default.
Our Business Selling Process
We have specifically designed our selling process to increase the chances of successful sale at the best possible price to sell your business.
Step 1. Deciding to use a business transfer specialist or business broker to sell your business
The sale of a business is a very complex transaction. There are many aspect to selling a business that a successful business owner is not exposed to on a daily basis. It can be time consuming to learn these skills and often are learned from years of experience. Most business owners simply don’t have the bandwidth or personal capability to effectively (and confidentially) sell their own business.
During the sale process, the business owner’s number role is to run the business the best way they know how. Focused on maximizing the profits and the showing a successful business to a new buyer. The business brokers role is to handle the logistics to sell your business in a confidential manner, pre-qualify and screen potential buyers and to be a buffer during negotiations when emotions run high.
Step 2. Choosing the Right Business Broker
There are many business brokers out there to choose from. Murphy Business Brokers hold themselves to a higher standard of integrity and professionalism. We are a member of the largest business brokerage listing program in the world and uphoad it’s ethics and standards.
We work hard to get each business the highest and best price for their business. Murphy Business Brokers specialize in ONLY selling businesses, so we are the experts and have experience in just about every industry because of our vast network to help you sell your business.
Our service is truly second to none. We are here to work hard for you and your family.
Step 3. Valuing the Business
In today’s competitive world, in order for a business to sell, it must be priced appropriately. With decades of experience in selling businesses we understand what the market wants and expects and will take the time and energy to understand your business to properly price your business. The main reason that a business fails to sell it that it is over priced for the market. The cornerstone to successfully selling a business is pricing the business correctly.
Our highly developed process allows us to compare your business to other businesses like yours that have sold and determine the appropriate price and terms.
Step 4. Structuring the Sale
Most businesses today sell for 50% – 75% down. The remaining 50% – 25% is financed by the seller, through a bank or through other resources.
Although many sellers prefer all cash, buyers are trying to stretch their funds and want to leverage their down payment to purchase the largest company they can. Buyers would prefer to make a no money down or low money down offer, although it rarely gets accepted.
The most common form of financing is usually seller financing. When a seller is willing to hold a note, it indicates to the buyer that the seller has confidence in the business.
The cheapest form of financing is with a bank. Banks will lend on businesses that have shown a strong earns history in their tax returns. Banks usually require buyers to put down some money ranging from 10% to 50% depending on the deal.
The last option is friends and family of the buyers that can either provide the funds or sign on as a guarantee for a bank loan.
To sell your business, you may need to offer selling financing.
Step 5. Time frame to sell a business
Selling a business takes longer than selling a house and sometimes longer than selling a commercial building. In order to preserve the integrity of the business, no signs will be placed in front of the business and everything will be kept highly confidential. This makes the sales process much slower.
The average time to sell a business is 6 to 18 months. There are some exceptions of course. Business Brokers are talking to buyers all day long looking for the right buyer for a particular business.
Step 6. Marketing a Business
Marketing a business is very different than a house or commercial property. Everything is kept confidential. So Murphy has leveraged all the business for sale websites to assure that we can capture the attention the right buyer.
Also, every business is properly packaged in a confidential memorandum that clearly outlines the business for a buyer. Proper packaging increase the number of interested buyers and often yields higher offers. This is done regardless of the size of the business.
Depending on the business, newspapers, trade magazine, and other creative strategies will be used to attract and locate buyers.
Also, we market every business on social media and through vast network of relationships around the globe to locate your best buyer to sell your business.