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Business owners devote time, effort, and the proverbial “blood, sweat, and tears” into their businesses. Establishing a business, getting it off the ground, and cultivating some success is demanding and can take years. For an entrepreneur or business owner, their company represents far more than a paycheck.
Business owners often view their company as an extension of themselves. It’s a representation of their values, work ethic, and a part of their legacy. It’s their second home, a second family, their retirement plan, and sometimes a plan for their family legacy. When it comes time to sell a business, it can lead to making financial decisions based on emotions. A reputable business brokerage firm can maneuver through the challenge of selling a business with consideration for the owner’s needs and the financial elements without the emotional charge.
At American Fortune Business Brokerage Services, we recognize the American business owner’s sacrifice, passion, and service. We exist to celebrate their success, validate their lifelong efforts, and ensure the continuation of their legacy.” – Brian Mazar.
Your “Why” is Still Important
From Friedrich Nietzsche to Simon Sinek, numerous figures throughout business and history discuss the need to understand your “why.” Many people apply this heavily when they’re opening their business but don’t consider their “why” when selling.
Why the owner is selling can help them understand the type of help or support they need during this process. When looking for business brokerage services, there are many options available, and it can seem overwhelming. To get started, evaluate why you’re selling your business.
American Fortune has launched several services designed to help business owners successfully sell their businesses at the highest possible prices and the best terms.
Our business brokerage services include:
- Exit planning
- Pre-sale preparation
- Setting asking prices
- Marketing and advertising
- Screening potential buyers
- Due diligence
- Closing deals
- Ongoing assistance
We developed our support based on the many reasons why business owners sell their companies. Whether an owner is just beginning to consider the idea of selling their business or if they were “ready yesterday,” our services look at the likely challenges and ideal outcomes to help these owners get the most out of this process.
The Purpose of Business Brokerage Services
If you are selling or passing on a business, then yes, you need support from a business broker. Business brokerage services give the owner the option to become more involved in understanding the business valuation, setting an asking price, and negotiating with potential buyers. Are you ready to sell your business on your terms?
Determine if You’re Ready to Sell Your Business
Many professionals dread the idea of selling a business because it’s often time-consuming, frustrating, and expensive. But it doesn’t have to be that way. You can make the process easier for yourself and your family by using experts who have years of experience selling businesses. Business brokers provide affordable assistance with tools and resources that business owners usually can’t access or build in a short time, such as knowledge of the market.
Similarly to opening your business, you’ll need to have a detailed plan in place before you’re ready to sell. Who would you prefer to sell the business to? You could sell to an existing business partner, an individual, or another company. Is your company primed for the best possible valuation? There are ways to set up the business for a better valuation based on its worth and assets.
Understanding Your Investment
Owners trying to sell their business themselves often approach the sale with unrealistic expectations and little preparation. The Exit Planning Institute of San Diego conducted a poll and found critical issues with how owners approach the sales process.
88% of respondents did not have a transition plan. More concerning, less than 40% had obtained a formal valuation when preparing their business for the market. That means at least 60% of these respondents did not understand their business’s value or personal investment.
Business owners almost always inaccurately value their business, and there are many reasons why this happens. First, they may base their evaluation solely on tax documents, which are notoriously inaccurate for sales purposes. Second, owners often overvalue their investment into the company or believe that they should have a full-return for everything they’ve put in over the years. Finally, they may miss critical elements such as favorable vendor contracts or their management team’s power.
Value Your Business
A business owner must know exactly what their business is worth on the market. Similarly to selling a home, the company simply won’t sell for a reasonable figure if it can’t back up the asking price.
You need to have a professionally prepared business valuation, which can stand as a strong defense during negotiations. Remember, on the market, your business is worth what someone is willing to pay. With the right support, you can find the person who is willing to pay the full value of what your business is truly worth.
A business broker will help you establish expectations based on market and industry trends. A formal valuation service will determine your business’s full value and is a significant first step to understanding how to prime your business for sale. When owners sell without conducting a formal valuation, they often take the first offer that comes along.
Prepare for the Best Timing Possible
Business success is not the only factor that leads to a successful business sale. Circumstances such as divorce or health issues can force an owner into selling the business during a bad time. Owners that have the luxury of choosing when to sell should start the process when the demand for business acquisitions is high. It will secure a better price for the owner and improve the likelihood of attracting ideal buyers.
All business owners, even those rushed to sell quickly, can prepare for the best timing of the process by:
- Presenting the business appropriately with EBITDA
- Providing clean financial documents to support the valuation
- Giving appropriate disclosure
Business buyers gravitate towards financially healthy businesses, healthy industries, and options that present the opportunity for growth. Providing appropriate disclosure for all areas of your business and presenting clean financials can help ensure that the process goes smoothly with minimal delays. Using these financials and giving disclosure can even support the seller’s needs, even when they need to sell quickly.
Ensure Financial and Legal Security
Financing and legal security are perhaps the most concerning elements of a business sale. The buyer must have reasonable expectations in terms of the sale as well. An unprepared buyer can cause the deal to fall out. Business brokerage services can include vetting potential buyers to ensure that they can actually obtain the financing they need to support the transaction.
Broker services should also handle the due diligence element of the transaction. Most sellers assume that the buyer understands the process and stages of purchasing a business. But buyers often are new to the process as well and can be difficult to handle. Even worse, buyers which haven’t owned or operated a business can be a challenge because they don’t understand any of the base-level expectations. It’s a catch-22 that sellers can benefit from working with an experienced buyer but that these same buyers will come back after 6-8 months of due diligence to claim the business is only worth 50% of the asking price.
Having a good grip on all possible issues that could arise during the buyer’s due diligence is critical. Another vital step is coordinating the closing of the deal. Many deals fall apart during the closing stage because of particular term issues such as purchase price allocation, financing, contract language, nervous buyers, and taxation. It’s fairly easy for either party to get spooked or kill the deal. Involving a business broker and working with a well-established business brokerage service firm can quell those concerns and help smooth out issues rather than letting the deal fall out.
Find Out How Business Brokerage Services Can Help You Sell Your Business
It is vital that you have a good process for selling your business. The more you know about potential problems and issues that could arise during the sale of a business, the more you can manage and overcome during negotiations and deal structure. Many buyers know how to play the game and use unsavory tactics to wear down sellers or outright waste their time. You don’t have to let potential buyers push you around.
Using qualified business brokerage services can help you value, market, and sell your business with your needs as a priority. American Fortune serves as a trusted firm for business sales. Speak with us today about planning your business brokerage services.
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To view our Business Brokerage Services in action, click here. Or, to speak with a Business Broker about help for your particular business sale situation, call us anytime at (800) 248-0615.
Business owners utilized our Business Brokerage Services in the following areas of the USA: Columbus Ohio, Atlanta Georgia, Lexington Kentucky, Bowling Green Kentucky, Nashville Tennessee, Memphis Tennessee, Cincinnati Ohio, Dayton Ohio,Toledo Ohio, Los Angeles, Cleveland Ohio, Pittsburgh Pennsylvania, Baltimore, Maryland, Indianapolis Indiana, Chicago Illinois, Detroit Michigan, Flint Michigan, Tampa Florida, St. Louis Missouri, Kansas City Kansas, Des Moines Iowa, Minneapolis Minnesota, Louisville Kentucky, Oklahoma City, Oklahoma, Dallas Texas, Fort Worth Texas, Denver Colorado, San Francisco California, Salt Lake City Utah, Phoenix Arizona, Lexington Kentucky, Los Angeles California, San Diego California. Our corporate offices are located in Los Angeles, California, Louisville, and Kentucky.
Sell a Business For The Best Price & Terms With The Help of the American Fortune Business Broker!