Selling a Business is All About Timing

There's a fine line between fetching the best price for your business in a market uptick, and being slightly early or a bit late. To get the best price for your business, it's imperative to prepare, so that when market conditions are ideal, you can strike.

When it comes time to exit a business, the goal of every seller is simply to get the best price. But with the economy still in flux, the question owners must be selling themselves is: When is the right time to get the best price? The fact is that while the economy has been slowing improving recently, businesses might not be able to fetch their peak price just yet.

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But things can change quickly in the business for sale marketplace. We've been seeing an uptick in sales recently as business owners grow more confident in the economy. For those who have been considering a sale, the time to earn that top selling price may be coming soon. That means now is the time to start preparing your business to impress prospective buyers.

Preparing to sell means building upon your strengths and fixing weaknesses so you can secure the best possible purchase price. Above all, make the transaction process easy for the buyer. This means being honest about your motives, expectations and business difficulties. Also, identify common buyer desires and concerns, while maintaining an open minded attitude. This will ultimately put potential buyers at ease with the critical purchasing decision.

Presently, buyers are encouraged to buy because many eager sellers are willing to negotiate the selling price, but it's essential to make sure that the willing buyer is the right fit for your company. Therefore, business owners must decide whether or not they are willing to potentially take a much lower price for their business. Although there is a smaller supply of businesses for sale, this is not to say that all business owners can't command good prices.

It turns out many of the essential business practices you've used to grow your business are also essential to selling your company. This often involves many aspects, including outlining the financial history and outlook for your business; improving the bottom line; overcoming any financial problems and preparing financial records for review by prospective buyers.

This also includes making sure to outline all of your assets (both tangible and intangible), lease conditions and debts both owed by and to you. If you haven't been diligent about keeping the books in a condition that will be easy for a buyer to understand, start doing that now.

Business buyers also want to know that they will have support from an existing workforce that is familiar with the business, its primary needs and existing customers. The employees you leave behind will ultimately help you sell the business. If possible, find an appropriate time to make sure all customers and employees know of the impending sale, but be careful about relaying the information too soon.

The last thing you want is a lack of motivation or loyalty because they know you will be leaving. Maintain the relationships to ensure their transition will be as smooth as the new owner's.

Other pitfalls to avoid include not showing the potential buyer a loyal client base; Exposing the buyer to customers who expects special treatment; and clients who have verbal agreements and contracts with you. It's important to provide the owner with this information and to examine contracts with suppliers to ensure the terms will not expire or need to be revisited when the new owner takes over.

Potential buyers won't be interested in a business that lacks a loyal client base or forces them to recover from damaging press. Happy customers are your best advertising. Conversely, one extremely unhappy customer will likely make ten other individuals turn against you, so combat criticism by being honest and communicative with clients.

One of the cheapest ways to get some loyal followers is by word of mouth. Besides one on one interaction, extend yourself online; correspond with customers via online social networks like Twitter to answer questions and talk about new business initiatives or products. It will show that your business is ahead of the curve in recognizing the importance of the digital channel.

Businesses with well known names, strong marketing and a well executed online presence will ensure a buyer that your business is staying current with the market trends. Because, in some business categories, 90 percent of initial buyer interest stems from the Internet, how well your web site functions, its content quality and the appearance will all give a buyer a first impression of your business.

Also, make sure your web platform is simple to navigate so the new owner can update it accordingly. Speaking at the local Chamber of Commerce and continuing to explore new avenues of advertising are still things you can do to build your brand offline.

A final component in the selling process to consider is whether or not to use business supervisor to ensure that your sale goes smoothly. Attorneys can assist you during the selling process by providing critical services such as preparing detailed contracts to finalize the sale or creating confidentiality agreements which safeguard against potential buyers revealing what they uncover through the due diligence process.