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Tips on Selling a Business

Selling a business takes preparation, planning and commitment by the owner. It is like any other project, set a goal, list the steps to get there and then work the plan. When you sell a business you will need to gather all of the important facts about your business and put them in a presentable form. Another important early decision is how you are going to sell your business. Are you going to do it yourself or with professional help. Most businesses change hands with the help of professional agents who are experts in selling a business. The help of a pro can be invaluable in getting a good fair price and selling the business in a timely manner. With the following ideas and tips an owner can begin to get at how to sell their business.

Information and valuation

In order to sell a business, the owner has to come up with a figure, which represents what he feels the business is worth. This price will become the asking price for the business. A price cannot be arrived at without accurate numbers and information about the business in question. Gathering this information is the first step in a number of them needed to sell your business.

The collected information is then used to come up with an asking price for your business. There are many formulas that are used to value a business. The industry the business is in will also determine how the sale price is developed. One of the current ways to get to this number is to hire an expert evaluator who has been certified by a recognized business seller’s organization. This certified evaluator is used in court cases, IRS cases and in the sale of a business like yours. Since this is a disinterested third party, both sides in the negotiation can usually use the value that is delivered. This valuation is arrived at by inspection of the company, use of your accountant’s figures and the industry you are in.

With the important first step, the game is on and the negotiations can be engaged in with serous intent. Every thing flows from this first step, so it must be as accurate as possible. This first move sets the tone for much of what follows in the sales meetings and conversations.

Get help or sell yourself

Selling your business without help from those that do it for a living, is the hard way to do it unless you have someone who is ready to buy At the very least it would be very useful to get a certified evaluation so you have third party support for your asking price. If you elect to try to sell the business yourself, you will be undertaking a time consuming project that may not fit in with running your business at the same time. But if this is your choice, then a way must be found to find a buyer. Advertising in trade magazines is one of the ways to find a buyer. Posting on when selling a business is a very effective way to let the public know of the sale. Acquireo has cheap advertising options for business owners and brokers and has proven marketing strategies to let the buyers know whenever a new business is up for sale. Locally you should let professionals you deal with and other business friends in on the fact that you are willing to entertain offers for your business.

The advantage of hiring a business selling pro is they have a network of buyers who are qualified and are seriously looking for a business to buy. If your business is a match for what his client is looking for you may have a quick and easy sale. Another plus is your business will be listed on their website and promoted throughout their network. You would not have this entry without being a potential customer of theirs. They may have access to financing your buyer may need in order to cash you out. A full service broker provides every service needed to make the sale of your business happen.

Cash out vs. terms for a sale

A “cash out” means the buyer pays an acceptable price in full to purchase your company. This purchase price may be less than one which includes terms, but this can be used as a negotiating tool. Cash in full is less than the price if the seller has to extend terms to complete the sale. If the seller agrees to be a holder of some paper to make the sale, then a higher price may be used as the final purchase price. Terms can be a powerful negotiating tool when getting down to the way the business will be sold. If the buyer wants terms, then you can agree if the purchase price can be raised.

After the sale help from the previous owner

After the sale is completed there may be time that the buyer and the seller agree that the old owner will help with the transition. This may include helping the new owner learn the business and how to handle the important customers. The old owner could take the new owner around and introduce him to the major customers. He can tell him about the strengths and weaknesses of the employees. His ideas for growth should be listened too with apt attention, as the old owner is more knowledgeable about what the company is facing and where it can improve.

He could also give a heads up about the competition and clients they should go after. His intimate knowledge of the facts, history and future possibilities should be noted and maybe even used. This is a terrific source that should not be wasted or forgotten about.


The many ins and outs for selling your business should be read about and studied. You have worked hard to make your company worthwhile and now that you are going to sell it you should get top dollar for it. A certified sale price is a step that all business sellers should make, for one reason. This value was given for your business by a pro who knows how to evaluate what a business is worth.

Selling a business is a tricky proposition and most owners would be wise to put this task in the hands of business broker who sells businesses for a living. They know how to do it and do it in a timely manner. They also can be of great value when in the negotiating stages. They keep this sometimes-tense situation on track and moving forward. They can talk both parties out of unreasonable demands.

If terms or financing become the only way to make the deal fly, their experience can be the deciding factor. This deal making knowledge can be the glue that keeps the deal together. The negotiating stage is a critical time in the sale of the business. Having an old hand involved in the talks can be very helpful and could make the final result be positive instead of negative. His clear-eyed view of the deal can help to dissolve hidden objections and misgivings that have not surfaced until now. Most owners would be wise to get out of the way and let their business be sold.

Franchise – Buy a Job Or Buy a Business

How can you make sure you buy a business, not a job? The last thing a buyer wants to do is to jump out of the job pan into the franchise fire. Without proper planning and serious investigation, the buyer can buy themselves a job with very long hours. They meant to buy a business, but they ended up with a job with excessive hours. The cause of this problem is the buyer did not do the homework to correctly understand the business and then plan for the personnel needed to cover the operating hours. In the poorly planned business the owner ends up captive to these uncovered hours. They have in fact bought themselves a job and not a business.

Areas to investigate

When considering buying a business, many potential business buyers are attracted to franchises. They believe that owning a well-known franchise will almost guarantee success. This is not absolutely true, but it does have merit. A food franchise is the most likely business to snare the buyer into buying a job. These businesses always are employee-heavy and always fighting a turnover of personnel. When the employees are absent from work or just non-existent, the owner must step in and do the job. Owners of food franchises must have a very good staff to operate efficiently and without excessive hours on their part. This takes planning, training, and ongoing recruitment of employees. If this is not planned for and built into the budget, this can be a factor that will over time ruin the owners’ passion for their business. The most important area the potential owner needs to know about is the number of people needed to run the business correctly. The franchise people or the previous owner should be able to give very detailed facts and figures in this area. The new owner must make sure the cost of proper staffing is covered in the business plan. Poor planning here can have devastating long-term effects on running the business.

Good employees and good staffing

Food franchises are in need of well-trained employees who are reliable and do the job the way it should be done. A staff that is good at their job is a treasure to have. One that is unreliable and lacking in job skills will be a constant headache for the business owner. This is an area that the franchise should be able to give very good advice to the new owner and also help in the training program. If you are buying a new franchise, this is usually included as it is critical to success. Hiring and training of staff are very important elements of a food franchise.

Training a good assistant is imperative if you ever want to have some time away from the business. With these elements in place, an owner can have days off and even take a vacation in the future. Without the personnel, the owner has bought a constant job with hours that will kill over time. When an owner has a good right hand person available to run the business, this will take a great deal of pressure off of the owner’s shoulders.

Trading Bosses or buying a business

Many franchise owners discover after they have purchased the franchise is that all they have really done is change from one boss to another boss. Many franchise operations are very restrictive and controlling as to what the owner can do when running the business. This includes setting hours of operation, who you can buy supplies from, where you can advertise and what you can advertise. The owner may discover that by contract, they have to participate in an ad that does not seem to work for their location. The answer to this complaint is to know what you are getting into before you turn over your money to the franchise seller. Make sure you understand all parts of the contract, including what you can and cannot do while running your business.

A very smart idea is to speak with other franchise owners before making the purchase. Ask all types of questions including would you do it again or not. Find out what they like and do not like. Find out what their day-to-day business life is like and are their things about it that they wish were different. Listen carefully as to what they like and do not like. It is far better to hear the truth before purchase than after the money has been handed over to the seller. Surprises are likely to be in the favor of the seller and not in the favor of the buyer. Make your own judgment as to whether the restrictions on owners is something that seems fair or just another profit area for the franchise seller.

Read about the pluses and minuses on the Internet

The Internet covers almost all aspects of what a franchise owner is likely to experience after becoming an owner. This and other owners are the best places to find answers from parties other than the seller. This information can be studied and then put into questions to the seller you are dealing with on a franchise. Informed buyers will always make better decisions and also maybe better contracts when making the purchase. Knowing what to look for that is not in your favor helps to keep mistakes from occurring in the deal. Study the prices that other franchises go for and the rational for the prices. This will help ferret out puffed-up prices and numbers that are hard to justify by the seller.

If the answers do not seem to make sense or are still fuzzy when answered, then the potential buyer can make a counteroffer or just walk away. There are good deals in the franchise business, but it is up to the buyer to find then with their own due diligence. Listen to the answers that are given, but then verify for your self.


There are many franchise offers that can be looked at by a potential buyer. The choice depends on the interest of the buyer. Be careful of buying a franchise that you have no passion for, as it will become a very big part of your life. It will help a great deal if you have a feeling for the business. There are large spreads in the prices of franchises for one solid reason. The price depends on what is included and if it is an existing business, how is it doing for the current owner? A high-profit business is certainly attractive if the price is fair in relation to the verified profit. If the staff is solid and the assistant managers are likely to stay, that is another big plus for the business.

Ask tough questions of the current owner like, “Why are you selling?” and “How did you come up with the price that you are asking?” Listen to the answers and verify any numbers that are given as part of the answer. Have your own experts go over the figures just to make sure they are accurate and give a true picture of the business.