Is it time to sell?
Selling your business is a major decision!
Following are some of the most common topics and questions frequently brought up by sellers. If you have any questions that we have not covered, please don’t hesitate to contact us.
For Business Sellers
If you’ve gone this far, then selling your business has aroused enough curiosity that you are taking the first step.
Insider Tips
If you have any questions that we have not covered please don’t hesitate to contact us.
The First Steps
Okay, let’s assume that you have decided to at least take the first few steps to actually selling your business.
Here’s a checklist of the items you should get together:
Three years’ profit and loss statements
Federal Income Tax returns for the business
List of fixtures and equipment
The lease and lease-related documents
A list of the loans against the business (amounts and payment schedule)
Copies of any equipment leases
A copy of the franchise agreement, if applicable
An approximate amount of the inventory on hand, if applicable
The names of any outside advisors
Notes
Insider Tips
For example: Is your business a corporation, partnership or proprietorship? If you are incorporated, is the business a C corporation or a sub-chapter S corporation? There are also tax rules that impact certain businesses on seller financing.
The point of all of this is that before you consider price or even selling your business, it is important that you discuss the tax implications of a sale of your business with a tax advisor. You don’t want to be in the middle of a transaction with a solid buyer and discover that the tax implications of the sale are going to net you much less than you had figured.
Who are the Buyers?
Buyers buy businesses for many of the same reasons that sellers sell businesses
A Buyer Profile
Here are just a few of the reasons that buyers buy businesses
Laid-off, fired, being transferred (or about to be any of these)
Early retirement (forced or not)
Job dissatisfaction
Desire for more control over their lives
Desire to do his or her own thing
Keep in mind the following traits of a willing buyer
The desire to buy a business
The need and urgency to buy a business
The financial resources
The ability to make his or her own decisions
Reasonable expectations of what business ownership can do for him or her
What Buyers want?
Vast majority of buyers want to buy cash flow
![utah-879945_1920](https://businessbrokersofidaho.com/wp-content/uploads/2021/01/utah-879945_1920-1024x678.jpg)
Insider Tips
Here are some questions that you might be asked – and, should be prepared to answer:
How much money is required to buy the business?
What is the annual increase in sales?
How much is the inventory?
What is the debt?
Will the seller train and stay on for awhile?
What makes the business different/special/unique?
What further defines the product or service? Bid work? Repeat business?
What can be done to grow the business?
What can the buyer do to add value?
What is the profit picture in bad times as well as good?
Buyers Wants Cash Flow
What can You do?
You should create an operations manual
Insider Tips
Buyers who want to go into business strictly
Usually are not realistic buyers for small businesses
![grove-park-memory-1450601_1920](https://businessbrokersofidaho.com/wp-content/uploads/2021/01/grove-park-memory-1450601_1920-1024x683.jpg)