Help Selling a Business : The Process of Selling Your Business
When the time comes to sell many business owners realize that they need help selling a business. It is a big transaction and can be very time consuming. I like to provide my clients with all the information that they need to make complete decisions. This section of my website is an extension of that.
As a Southern California Business Broker some of the most common questions I get asked by both buyers and sellers have to do with the process of buying or selling a business. In this section I'm going to describe the process of how a business is sold. Although this section is geared towards an individual who is selling, a business buyer will go through a similar process.
Please note that this is the process that I follow. Other brokers may recommend or follow a different process. If you are a business buyer and are purchasing a business from the owner directly they may want you to follow a different process. The process I outline in this section is a process that has been shown to be successful and coincidentally is recommended by the California Association of Business Brokers.
On the various pages listed below which describe the different components of this process in more detail and I will explain the reasoning behind the order of these steps.
A very common question I get from business owners is how long does it take to sell a business. On average a small to medium sized business will take from 6 to 18 months to sell. Larger transactions generally take longer. Please remember that this assumes that the business is priced correctly and marketed effectively. Many business owners are aware of the amount of time it takes to sell a business. For the business owner who is ready to retire and is unaware that it could take 18 months to sell their business this news comes as a bit of a shock.
Remember when selling a business many things need to happen and they need to happen in a particular order. A potential buyer must meet quite a few criteria. They must be ready, willing, able, qualified and eager to take on the risk and responsibility of owning and operating a business.
Furthermore, if a formal valuation is needed this could add to the amount of time that is required to sell a business. The formal valuations that we offer generally will take 4 to 6 weeks to complete. In some cases if the valuation is needed before we can list the business.
Unlike other sections of this web site where I made an effort to not include a lot of personal opinion this section is interlaced with my opinions and philosophy as how a professional business broker should operate. One of the reasons I spend a good deal of time educating my clients about the process is that if the seller is well informed and prepared for the next steps in the process then we become a cohesive team workings towards the common goal of a successful and profitable sale of the business. I have found that by spending and investing some time in the beginning learning about my client's business and educating them about the process I am better prepared to facilitate the sale of that business when the time comes.
Step One: The Assessment Meeting
OK - you would like help selling a business - Let's discuss your goals. The initial meeting with the broker and clarifying your goals. What do you want to accomplish? What does your broker bring to the table?
Step Two: The Financial Document Review:
A review of the financial documents, determining a listing price, and the representation agreement.
Step Three: Developing a Marketing Plan
Learn the different strategies that I employ to attract capable, qualified buyers for your business.
Step Four: Screening and Qualifying Buyers
What happens once buyers begin to inquire about the business. A discussion of buyer screening and qualifying.
Step Five: Soliciting Offers
Soliciting and Negotiating Offers. Arriving at the purchase agreement.
Step Six: Due Diligence
Learn the roles and duties of the buyer, seller and broker.
Step Seven: Escrow
Learn the roles and duties of escrow. Learn how businesses are transferred.
I would like to invite you to subscribe to my newsletter. I often use this monthly e-newsletter to discuss topics such as escrow, due diligence, new owner training, etc., in greater detail. If you do not have time to read this section in its entirety, sign up today and I can email you new articles when they become available. You can unsubscribe any time and your information is never shared with any third parties.
Do you need help selling a business? If you are a business owner in the Southern California area and are considering selling your business I'd urge you to contact me. If you do we can set up a confidential complimentary consultation where I can review your business and discuss the process of selling your business in greater detail.
Go to California Business Broker .com contact page
More information and more help selling a business - Return to California Business Broker . com home page