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9 Steps to Sell Your Business Fast

Selling your business fast and at a fair market price is the goal of many small business owners. After making the decision, “I want to sell my business,” there is nothing more frustrating than having the market respond or getting very low offers. Understanding the selling process will greatly help you to sell your business faster.

To sell your business fast, follow these 9 steps.

Step 1. Establish Fair Market Price

This is the most important part of selling your business. Because the value of the business is more than just the equipment and furniture and fixtures, determining the fair market price requires detailed knowledge of the market place and what buyers are paying as well as an in depth understanding of your business.

To obtain the fair market price, you will need to contact a business broker or business valuation specialist who values businesses on a regular bases.

To estimate the fair market value, minimally your valuation professional will want the following documents:

  • Last 3 years of tax returns
  • Current Profit and Loss Statement
  • Current Balance sheet
  • Copy of Lease

Because small things, like outstanding Daily Deal coupons, can make a buyer walk away, so it is important to be open and honest about your business in order to establish the Fair Market Value.

Step 2. Prepare a Confidential Memorandum

The Confidential Memorandum is a brief summary of your business that answers the key questions that buyers ask. This is only shared with a buyer after they been pre-qualified and have signed a confidentiality agreement. This document drastically reduces the time wasted with unqualified and not serious buyers. Many business brokers will only prepare this document for larger businesses because it is very time consuming and detailed. As the owner of smaller business, your business will sell faster with this document. This is the foundation of your marketing program and basis by which the buyer will evaluate your business. It really is a must to sell fast.

Step 3. Market your business – confidentially

Once the profile of the ideal buyer is determined, it’s time to create a strategic marketing plan to attract that buyer. That could through the internet, paper advertising or direct marketing. With over 90% of the buyers coming from the internet, It is important to leverage the internet as a tool to sell your business fast.

Some brokers will market to 30 sites while others market on over 300 sites. When choosing a business broker, consider their familiarity with online marketing techniques to help you sell fast. If you had to advertise yourself on these sites, without using a broker, you might pay up wards of over $1000 per month and no guarantee your business would sell. This is one area where using a business broker that understands marketing can help you find the ideal buyer faster and cheaper.

Step 4. Screen and meet with qualified buyers

This can be the longest and most intensive part of selling a business. One business can get 20-30-50 calls and each buyer must be taken through a detailed screening process to determine if they meet the criteria of the ideal buyer. This includes a phone interview, financial background check, often a criminal record check, as well as a confidentially agreement. Finding buyers is easy, finding the perfect buyer takes times and profiling skills.

Sadly, when a business owner tries to sell their business them self they fail to properly screen prospective buyers and this can lead to devastating results, both financially and legally.

Step 5. Presenting the business

Once a prospective buyer has been qualified and if required, the seller has approved the person to see the confidential memorandum, then it is time to present the information about the business.

After the presentation, the next step is to qualify the buyer to see if they are serious about buying the business before they ever see or meet you, the seller. This saves you time by only meeting with pre-approved, pre-qualified buyers that know about the business details.

Step 6. Conduct a buyer seller meeting

Once a prospective buyer has been found that meets the criteria, can be financed, has sufficient down payment, and is serious about pursuing your business, it is time for you to meet them.

This gives the you, the seller a chance to meet the buyer and discover their style, attitude, and personality. This gives the buyer a chance to ask more questions. After this meeting, if the buyer is serious either a letter of intent (LOI) or purchase agreement is completed.

Step 7. Negotiations

When selling a business, everything can be negotiated. Deals can be as creative as they need to be in order to meet the needs of both the buyer and the seller. Here are few of the terms that can be negotiated: price, seller financing (down payment and interest), time the seller stays with the business. Who pays commission, and much more. A well trained business broker can assist in structuring the deal so that everyone wins and this is one of the greatest advantages of using a business broker.

Step 8. Due Diligence

After the offer has been accepted, the due diligence period begins. Due diligence is the process of verifying all the important information in the business as pertains to the sale.

The due diligence process should answer the questions:

Should I buy it?

How much should I pay for it?

How am I going to pay for it?

The buyer is responsible for the due diligence process and can take anywhere from a few weeks to a few months or more. If you are offering seller financing this is also the time that the seller is able to perform their due diligence on the buyer. This often includes: inspecting their background, financial position, credit history and more with proper authorization.

Step 9. Getting the deal closed

For professionals that exclusively sell businesses, closing deals is routine. Your business broker should attend the closing with you to assure all the paperwork is correct, all the documents are in place and to answer any last minute questions or concerns. This is not a time to short cut the process. Many deals have fallen apart at the closing table and without a representative to bring it back together, your business might be left unsold.

Selling a business fast and at a fair market price is not easy and there are many pitfalls along the way. Because this just might the majority of your retirement, the most expensive thing you can do it try to do it yourself. Using a professional to guide you will not only help you to sell your business fast, but to ensure you get the best deal you can.

Small Business Start-Up – Why You Need a Business Plan

Anyone who is starting up a business or plans to set up and run their own business needs to have a business plan. Many people think they only need to have a plan if they are going to be seeking funding either from a bank or an institution or an investor, and as such they either leave it to the last minute or just put on paper a few ideas that they think will impress an investor or figures that they think the bank or institution would like to hear or see.

This is a real mistake. A business plan can be a unique opportunity for someone to actually focus on the reality of their own business and having a business plan, model or template allows them to gauge the reality of their business in a way that simply wishful thinking will not.

There are many online draft business plans or templates available all of which have a fairly similar plan which if followed will give the entrepreneur or business owner a unique insight into the reality of their business.

A business plan should essentially have a cover sheet, an executive summary, a table of contents and the actual document itself which should include the business, financial data and any supporting documents that might be of value. This business plan can of course be used also if funding is being sought. The body of documents should focus on the nature of the business and how the thinking behind the business has developed and is developing. There needs to be a description of the business both short-term and long-term. There needs to be analysis of what competition there is, where that competition comes from, and what the weaknesses of the competition are or where you as a business owner have an entry-level advantage over them.

There needs to be some sense of how or where you intend to market or advertise your business. This will include a number of free or paid options available both online and in the real world. Social networks are a rich source of marketing but this needs to be done well and have time spent on them. Word-of-mouth recommendations from satisfied customers or clients are important and can help spread business. Knowing who’s going to help you with your business, by which personnel either paid or unpaid is important. Specify who is involved in a business and what role they have and whether they are paid, voluntary or whatever their role.

Have as much financial data available as possible. Have a specific note of loan applications, overdraft applications or any other approaches you have made the kind or pending for any funding. Have a balance sheet that is easy to update at any point. Have a list of capital equipment and expenditure as well as a list of suppliers both to and from you. If available have a profit and loss statement that is clear and unambiguous even if not audited. It is a good idea to break down the profit and loss statement as well as any yearly summary you may have into a level of detail that can easily be assimilated. This might mean giving monthly breakdowns, or quarterly breakdowns if it is more appropriate. Cash flow is or was a hugely significant issue in any business, and if you are looking to set up or run a business, having an estimate of what your cash flow is and isn’t will be ready helpful.

Have your business plan include other supporting documents can help make sense of the business. It is difficult to be prescriptive about what these documents should be, but they should include any tax or legal documents that support the nature of the business all the business itself. This can include insurance documents, leases or sub leases, tax returns either by yourself or any principles involved in the business. Copies of any franchise agreements of these are relevant as well as copies of licenses and any other legal documents that may be relevant.

A Profitable Business Idea and Marketing Research

The task of coming up with a profitable business idea can be very daunting. Setting up your own business requires you to think rationally and thoroughly so as to plan and make key financial decisions. You should have a written business plan. There are many already existing business opportunities that you can choose from. Therefore, being an entrepreneur doesn’t necessarily imply that you Must come up with a new unique business idea.

There are many advantages of choosing an already existing business to start your business from. The main advantage is that the existing business opportunity has been already in the market therefore its products are already selling. You’ll not need to spend a lot of money in marketing the products because they have customers who already exist. Your task is to find the best strategic location where you’ll locate your business and also raising the amount of capital required to start and run the business.

You must ensure that you meet all the requirements including legal procedures before you start operating your own business to avoid breaking the law and being penalized. You should bear in mind that starting a business by using or improving an already existing business doesn’t imply that it will be profitable. It is either that it will be making profits each year or hardly making any profits.

It is upon you to make a decision whether to start from scratch by coming up with your new profitable business idea or look for an existing business idea to adopt. It takes a great idea for one to come up with a new business idea that is profitable. However, a business idea that is profitable in the present time cannot remain to be profitable throughout. It will reach a time that it will face stiff competition as a result of new technology, new superior substitute products or other factors that will make its profits to decline.

As an entrepreneur, you have to be aggressive and innovative. Innovation of entrepreneurs doesn’t necessarily imply invention of a product but it also implies coming up with new ways of reducing costs and improving the existing products. You should take risks by investing in profitable business opportunities you come across.

Do not focus on profits alone if you want your business to succeed but you should be customer oriented. When you’re customer oriented you’ll satisfy the tastes, preferences and expectations of the customers. You should not operate the same business throughout without improving the quality of your products and finding out from customers what they want your products to do for them.

What You Should Know About Making Profits

You should have a clear view when it comes to making profits before you start your business. Your business will fail if you miss to apply the objective of earning profits. Entrepreneurs are not supposed to focus on the objective of maximizing profits only. Focusing solely to maximize profits will lead an entrepreneur to charge a higher price for his products, exploit employees or produce products that are of low quality. An entrepreneur who solely wants to maximize profits will never make his business to be successful.

The enterprise that is coldly and solely motivated by the making of money seldom fares well in the long run~By Apply.

However, this is not to say that entrepreneurs should not make profits. Entrepreneurs should focus in satisfying customers and making adequate profits to cover all costs incurred i.e. making adequate profit to enable the survival of the business.

The problem of any business is not maximization of profit but the achievement of sufficient profit to cover the risks of economic activity and thus to avoid loss. But whether it is the motive of business to maximize profit is debatable. However, it is an absolute necessary for the business enterprise to earn at least the profit required to cover its own future risks and enable it to stay in business and maintain intact the wealth producing capacity of its resources~By Prof. Peter Ferdinand Drucker, the world-renowned consultant of management.

Marketing Research

Many upcoming entrepreneurs face the problem of product failure. You should keep on changing your marketing strategies and improving your products so as to satisfy your customers fully. You should not guesswork that the products you’re intending to sell will be purchased. You should find out facts in the market if your products will be purchased.

Nowadays, marketing research is vital. Why? It is because consumers know what they need and want thus you should find out from them by conducting a marketing survey. Marketing research will also help you to know if the business you want to start will be profitable. To avoid the risk of your business failing, you should find out;

1.) If the products you’re intending to sell are needed in the market.

2.) The place where most potential customers are in order to locate your business near them.

3.) The expectations of potential buyers. Find out from potential buyers what they want your products to do for them.

4.) The purchasing power of the customers so as to make your products affordable. This will help you to know the quantities you should pack your products. Customers with a higher purchasing power will have the option of buying the products that are packed in large quantities e.g. 1Kg, 5kgs, 10kgs, 20kgs etc. On the other hand, customers with low purchasing power will have the option of purchasing your products that are packed in small quantities e.g. 50gm, 100gm, 200gm, 500gm.

5.) If the business you intend to start has competition so as to find your own unique selling proposition to beat your competitors.

6.) The size of the market for your product so as to know how much products you’ll produce and the amount of capital to invest.

You should take a step in widening your horizons and in taking your time to search for business opportunities. Read widely business magazines, business management books and other business publications. You should make your business to be the best choice in the market by satisfying your customers, gain loyalty of your customers.