Successful Online Business for Sale Listing

2misi.com

Each year, thousands of business owners decide to sell their business for a variety of personal and financial reasons. Whatever the cause, selling successfully requires the owner to think creatively in terms of attracting the most potential buyers and weeding out the ones who are not really serious about buying.

To realize the most success in selling your business online, it is imperative to maximize the effectiveness of your listing. A well thought out and well written listing will allow you to attract more prospects and better sort out the serious buyers from the rest.

By keeping in mind the following "8 commandments of quality online listings," you can help ensure that your business attracts the best potential buyers, and that the selling process goes quickly and smoothly.

1. Include Key Financials

It is essential to include as much financial information in your listing as you can. Including the numbers, such as revenue can greatly increase the amount of views for your business listing, as this is the most common way potential buyers search for businesses.

Disclosing the financial information of your business in a listing is likely to build confidence in potential buyers. If you do not include the information, buyers might get the impression that you have something to hide and quickly navigate away from your listing.

2. Provide Maximum Geographic Information

Sellers should provide as much geographic information they can without revealing the exact identity of the business. Most buyers search at the county level, and by hiding the county of your business in your listing, you eliminate your listing from their search results.

Many sellers are hesitant to provide details on their business's location, but doing so will almost always result in more messages from potential buyers.

   
3. Be Creative with Your Headline

Your headline is what gets potential buyers to click on the listing in the first place. An eye catching, well thought out headline will help separate your business for sale listing from the pack. Before listing your business, put yourself in a buyer's frame of mind. It will help to draft a list of the qualities of your business that would most make you want to buy.

 If you bought the business from someone else, remember what features first made you interested. Was it an ideal location, or a great looking space? Decide what is best about the business you are selling, and prominently feature those details in a headline that effectively conveys what is special about the business.

       
4. Include the Right Contact Information

It is crucial to include a phone number in your business listing to reassure potential buyers and maximize contacts. To maintain confidentiality, though, it is not a good idea to provide the phone number of the business you are selling. Instead, provide a personal or alternate phone number people can call to inquire about the listing.

Although it can help to provide a variety of ways in which a buyer can contact you if interested, you should generally avoid including your personal email address to protect against spam and protect confidentiality. Instead, it is a good idea to create a new email address specifically for responses from your listing. If you do so, make sure you check the account daily to avoid missing any responses.

Whichever forms of contact you choose to include in your listing, be sure you have a strong follow up process. Respond to questions about your listing right away, and if prospective buyers seem serious, do not keep them waiting too long for information or they will likely become discouraged and look elsewhere.

5. Be Descriptive

The most effective way to instill confidence in prospective buyers and get them to respond to your listing is to use a generous amount of description. When a seller provides very limited details about the business for sale, buyers will probably think it is because the seller has something to hide. In order to ensure prospective buyers are confident in what you are selling, you have to appear confident.

 6. Include Pictures
 
One of the most effective ways to differentiate your business for sale listing from the rest is to include photos. While you should probably not include a picture of the outside or any obvious interior section of your business to maintain confidentiality, there are other ways to mix images into the text.

For example, taking a photo of one of the rooms of your business - making sure to capture its best features - can give potential buyers a good look at what you have to offer without sacrificing too much confidentiality.

Free online images databases such as Google Images can also serve as a useful source of imagery that you can help you create your listing to stand out from the crowd. However, be careful not to select images of any part of any specific business that is not yours. Instead, find generic images. Does the business your selling offer dining? If so, try to find a generic image of a table setting showing the kind of food the restaurant serves, for example.
 

http://www.2misi.com/article/2012/07/successful-online-business-for-sale-listing

How to Negotiate on Price When Selling a Business

2misi.com

http://www.2misi.com/article/2012/07/how-to-negotiate-on-price-when-selling-a-business

Any owner can put a business on the market, but selling successfully is another story. In a typical business sale, the negotiating skills of the buyer and seller can result in dramatic swings in the final selling price - regardless of how diligently the seller has prepared the business for sale. If the seller isn't up to the task, almost all the work that has gone into the listing can be undone in a single negotiation session.

Unfortunately, this undesirable situation frequently becomes a reality for many sellers in the marketplace. The good news is that by equipping themselves with a basic understanding of the negotiation process, sellers can learn how to stand their ground and get they deserve.

The overarching principle of successful negotiation is to negotiate from a position of strength. That's sometimes easier said than done, but in today's business marketplace there are many ways for sellers to favorably and accurately position themselves before the negotiation process even gets underway.

Avoid a Distressed Sale

A stressed business is easy prey. Although sellers don't always have a choice about the timing of the sale, many times they do. Unless the business is in imminent danger of going belly up or is being forced to be sold by family circumstances such as death or divorce, sellers should plan for the sale far in advance and be prepared to list it when market conditions are ripe.

Leverage Valuation

The valuation process is designed to provide a rational basis for the selling price. Sellers who throw together a flimsy, guesswork valuation at the last minute automatically put themselves at a disadvantage during negotiations.

Create a Bidding War

Almost everyone knows someone who sold a house above the selling price because more than one buyer expressed interest at the same time. It's possible to create a similar scenario in the sale of a business, but to do it the seller needs to maximize the attention the business receives in the marketplace.

One of the best ways to maximize exposure is to list the sale online. The majority of business buyers conduct their search themselves, and increasingly, the place they do so is on the internet. By listing online, sellers have the ability to customize their listing in ways that can make it truly attractive and boost visibility to stir up competitive interest among buyers, all of which can give the seller the ultimate upper hand in negotiations.

Be Patient

Patience may be a virtue, but when it comes to selling a business it's also a necessity. The owner of a well positioned business should have the ability to wait until the right buyer - and the right price - comes along. If the business absolutely must be sold in a short time period (six months or less), then the sale begins to exhibit the qualities of a distressed sale and the seller will be at a significant disadvantage in negotiations.

The patience factor really comes into play during negotiations when it impacts who wants the sale to happen more - the buyer or the seller. Even though the seller may be anxious to seal the deal, the person who appears to want the sale to happen the most is at a disadvantage.

As more business owners seek to sell their businesses on their own, negotiation skills will continue to become more and more critical. The better sellers can prepare in advance and stand firm on the terms they desire, the greater success they'll have for a smooth and satisfying sale.

Dealing with Your Prospects

2misi.com

By following some simple communication guidelines when selling your business online, you can ensure you don't get caught up in a communication nightmare.

 
Step 1: Be Knowledgeable About Your Business

Know your business before you put it up for sale.
It sounds simple, but the fact remains that many business owners list their establishment for sale online without having a clear grasp on how much their business is worth and what facts to communicate to potential buyers.

The first step is to get all the financial information of your business in order, including cash flow and revenue numbers that span from the time you first owned the business to the current day. After you list your business for sale, you'll undoubtedly have to field legit financial questions from potential buyers, and you won't want to come off looking irresponsible or uninformed about your own business.

When you have made yourself an expert on this basic information, you can confidently put your business on the market and begin communicating with prospective buyers.

 
Step 2: Identify Serious Leads
 

Once you have listed your business for sale online, it's time to sit back and wait for the buyer leads to come in. Unfortunately, it is likely that some of these leads will not be from serious prospects, and it will be up to you to decide if an inquiry seems legit enough for you to devote a large amount of time and effort into following up.

Once a potential buyer has made initial contact, you can ask them some simple questions to quickly gauge how serious they are about going through with a transaction. These types of questions include how long they have planned on buying a business, how they plan on financing the business and how much money they have available for a down payment. If the contact provides vague or unconvincing answers, you'll probably not want to invest too much time and effort into keeping the conversation going.

Step 3: Keep Communication Flowing Through Purchase and Beyond

Now that you have found the perfect buyer, you'll have to continue effective communication through the purchase process and after.

After the business description and purchase price have been described, the purchase agreement typically deals with how the buyer intends to pay. Most buyers cobble together a variety of payment methods to complete the sale, each of which needs to be clearly discussed and identified.

Buyers should look for a clear schedule of payments with escrow agreements attached to any payments that are due prior to final closing. If the seller is financing part of the purchase price, the repayment schedule should also be described along with collateral requirements and interest details. This can become a sticking point if the seller expects to secure a first collateral position for assets that will be held as security by other lenders.

When a business is sold, the seller makes certain promises to the buyer in the form of warranties. These warranties are an extension of due diligence for hidden threats or liabilities that would devalue the business or its assets.

http://www.2misi.com/article/2012/07/dealing-with-your-prospects

Keeping it Confidential

Confidentiality is usually critical to the business selling process. Confidentiality is important for a variety of reasons. Customers, competitors, employees and creditors all will have different reactions to finding out that your business is for sale. Buyer prospects themselves often react negatively to a business opportunity that has not been kept confidential.

2misi.com

http://www.2misi.com/article/2012/07/keeping-it-confidential

As a seller, you may not want your employees, customers, competitors and creditors to know that your business is for sale. Employees, fearing the unknown, may quit. Customers, fearing a decline in performance, may switch. Competitors may spread rumors. Creditors may get nervous. For your business, a breach of confidentiality may spell disaster because any one or more of these reactions can happen.

But, even if confidentiality doesn't seem important in the short run, at least one major problem may arise when the business remains on the market for an extended period. If your business is known to be for sale for too long, it may appear to be 'shopworn merchandise' to buyer prospects. This drives the price down. It may even make your business impossible to sell.

Here are the three steps most supervisors take to ensure maximum confidentiality for their clients.

Step 1: Prepare Blind Ads and Listings

'Blind' ads and listings are used by almost all business supervisors. However, writing effective blind ads and listings is difficult. An ad or listing that's too general won't get a good response.

A 'blind ad' is an advertisement that camouflages the identity of the business in some way. A 'blind listing' is a camouflaged description of the business in a multiple listing database. The goal of any business opportunity ad is to attract buyer prospects. When the identity of the business has to be guarded, though, an ad has to be cautiously worded. When this happens, the ad may lose its effectiveness. The less specific it is, the more it looks like every other ad.

"Manufacturer for Sale. Call Supervisor." will get a minimal response. Describing the business for sale as a "Manufacturer of low tech product" will get a better response. "Manufacturer of low tech product in high tech market" will get the best response. Adding details to an ad usually improves response.

The more details you add, however, the more you risk breaching your own confidentiality. Remember that there may be competitors and employees reading your ad. They can be pretty creative in assembling information from different sources! This is especially true if they already suspect something.

The business supervisor usually has many businesses for sale which attract buyer prospects. Buyer prospects respond strongly to ads which indicate that the supervisor has a wide variety of business opportunities, even if the individual business descriptions are vaguely worded. The supervisor can then mix and match buyer prospects and listings.

The supervisor may also have more than one like kind business for sale, further helping to mask the specific identity of any particular business. If a supervisor advertises five manufacturers, for example, buyers will call on the ad anyway even though no more information is provided. The fact that the supervisor has five such opportunities is sufficiently compelling to get the desired response.

Step 2: Pre Qualify Buyer Prospects

Screening and pre qualifying buyer prospects is perhaps the business supervisor's most valuable service to protect seller confidentiality. Make sure this is done in your business selling process. Establish a process of screening and pre qualifying prospects before the first ad appears.

Neither consultants nor sellers can afford to spend time answering detailed questions posed by these often well intentioned, but nevertheless unqualified, 'tire kickers.' If you are selling without a supervisor, don't forget to establish a separate phone service, email or postal address to receive inquiries. You don't even want to think about handling buyer responses without a buffer between you and the unqualified tire kicker.

Prepare a form to record information about the buyer prospects as each contact is made. Prepare a short 'script' to answer the questions you anticipate without giving away the identity of your business. It will take some experience before you know what questions buyer prospects will ask. Also give some thought to what type of buyer you want. How much cash do they need to buy your business? What minimum skills and background must they have? How are you going to ask for, and collect, this information?

Step 3: Register Buyer Prospects

Supervisors require buyer prospects to provide background information about themselves and to sign a confidentiality (or non disclosure) agreement. Our simple form asks for the buyer prospect's contact information, acquisition criteria, and financial disclosure of cash available for the business purchase.

It can be tempting to relax buyer prospect qualification requirements. Both supervisors and sellers are naturally enthusiastic about new prospects. It is always exciting to have the phone ring. This feeling is even more intense if there hasn't been much response to the marketing effort, or if a negotiation has just fallen though and the seller is 'on the rebound.'

A sincerely interested and qualified prospective buyer will almost always be courteous, understanding and compliant with a registration and pre qualification process that is fair and reasonable. It is critical, even at the level of the smallest business, that you know who is trying to buy your company.

Sell it Yourself or Hire a Business Supervisor

2misi.com

The biggest issue to consider is that any transaction, no matter how straightforward or simple, will take time and many hours of your actual involvement in meetings, discussions, negotiations, reviewing documents and other time consuming phases of the process. You need to ask yourself if this will distract you from continuing to operate your business. Although your goal is to sell the business, what if it doesn't sell? The last thing you want is to lose focus on your business for an extended period.

Using a Business Supervisor

 

The key benefits to hiring a supervisor are:

1. They allow you to run your business while it is being marketed for sale
2. They can be a good buffer between you and the buyer
3. They can handle the flow of documentation
4. They have done it before and have likely dealt with most challenges that can arise

Selling It on Your Own

Even without a supervisor's involvement, every transaction has intermediaries or at least should such as attorneys, accountants, mentors, advisors and business associates.

Here are a few things to consider before deciding:

• Do you really have the time to do this?
• A business sale involves a lot of preparation. Are you willing to properly package the business and invest in the necessary materials to do so?
• Do you have access to an experienced transactional attorney who can assist you and at what cost? On this note, while every attorney will claim to be a "deal maker" not a "deal breaker", many are in the latter category.
• Are you comfortable making all of the decisions you will face in the process?
• Have you ever sold a business before?
• Will selling it on your own take away from the day to day running of the business?

Summary

Ultimately I believe that the decision should come down to timing. If your business has just a few employees or is the type where you are heavily involved everyday, I would absolutely recommend hiring a business supervisor. If, on the other hand, you have sold a business or two before and have the necessary resources to commit to this project then it may be worth it to first attempt it on your own. However, if you do not generate a lot of activity or have a pending sale within three to four months, be humble and engage someone who does this for a living everyday.

http://www.2misi.com/article/2012/07/sell-it-yourself-or-hire-a-business-supervisor

Items to Consider When Deciding to Sell on Your Own

2misi.com

In the world of real estate, selling without the assistance of a real estate agent has received a lot of attention. But is it really a good idea to try and sell your business on your own?

Is it possible to sell your business yourself? Absolutely, but it's not for everyone. But in most, the smart move is to hire a professional business supervisor to list your business and locate pool of potential buyers.

Business supervisor can add a lot of value, most importantly by maximizing the selling price of your business. Here are just a few of the things they bring to the table that you may have trouble doing on your own:

• Setting the Selling Price. Anyone can set an selling price for your business. But it takes experience to set an selling price that is neither too high nor too low for the marketplace. Although your business supervisor will work to get the highest possible price for your business, he also understands that the price needs to be at a level that allows buyers to meet income and cash flow requirements right out of the gate.
  
  
  Even more, a good business supervisor will be able to adjust selling price that may arise over the course of negotiations (e.g. cash sale vs. partially financed, finance terms, etc.).
  
  
• Laying the Groundwork for Negotiation. Their experience in business sales gives them invaluable insights into the minds of buyers and the workings of the marketplace itself. Most business supervisors are especially adept at developing a negotiation strategy that drives the sale toward its completion and enables the seller; to achieve your exit goals. But creativity and expertise aren't the only negotiation related benefits you can gain from a business supervisor. Many sellers also find that business supervisor give them a much needed objective perspective throughout the negotiation process.

• Marketing Your business. If you think marketing a business consists of placing an ad in the local classifieds, then it's definitely time to hire a business supervisor. Marketing a business is a highly involved and complex process; and business supervisor are experts at doing it right. A marketing strategy can include a variety of tasks including the preparation of a business plan, the compilation of promotional materials and the analysis of target markets. An additional wrinkle comes into play when the seller needs the sale to remain confidential for business or personal reasons. By limiting marketing efforts to a narrow band of qualified prospects, the business supervisor can maintain a low profile while ensuring that the right people know your business is on the market.

• Pre-Qualifying Buyers. As you might expect, there are a lot of tire kickers out there in the business for sale marketplace. I've seen too many sellers invest time and energy in a prospective buyer, and then find out later that he lacked the capacity and genuine desire to actually purchase the hotel.
  Business supervisor are extremely knowledgeable about which buyers are serious and which aren't, and just as importantly, which buyers possess the financial resources and skills to actually complete the transaction. Business supervisor possess the expertise and processes to quickly cull out the tire kickers and unqualifieds before they sap valuable time and energy from your sales process.

At the end of the day, it's your decision whether to hire a business supervisor or to attempt to sell your business on your own. Just make sure you know what you're getting into; be realistic about your skills and the time commitment it will require.

http://www.2misi.com/article/2012/07/items-to-consider-when-deciding-to-sell-on-your-own

Selling a Declining Business

2misi.com

http://www.2misi.com/article/2012/06/selling-a-declining-business

It always amazes me when I meet with potential sellers whose businesses are in decline and they are surprised learn that buyers will not pay them based on their "glory days" of the past. Sometimes they're shocked to hear how little value their business may bring in the marketplace. The small business market is not ripe with turnaround experts. Buyers are mainly looking for stability, growth is a bonus.

Before we get into the meat of the article, you need to know that the best time to sell a business is when it is doing well, very well. It is far more difficult to generate any excitement when you bring a declining business to market. However; if you're faced with that predicament and must sell the business, here's what you need to know and consider:

• Can you resurrect it? If so, at what cost and how long will it take? Unless you have no choice, it may very well make sense to dedicate yourself for a year or so to bring the business back up. Doing so will clearly demonstrate to prospective buyers that the business can grow.
• Be completely honest with any prospective buyers - explain to them precisely why the business has declined no matter how difficult it may be for you.
• Spend some time to write down all of the reasons you believe contributed to the decline, what you would do differently if you could go back in time, and what can be done now to repair the damage. This will serve to be a very useful document to the buyer.
• Consider offering a longer transition/training period to the buyer although they may actually want you around for less time, but at least offer it.
• If you find a genuinely interested party, work to get a deal done somehow. Good buyers are hard to find. There are a ton of businesses for sale. If your business is not doing well, and you have an interested party, you may not come across another again.