To successfully sell a business requires a lot of preparation, attention to detail and organization. Most sellers badly underestimate both what needs to be done and what to do if a buyer comes along. A good rule of thumb is that it takes 10 buyer inquiries to reach a potential and qualified buyer. There is not a shortage of buyers; there is a shortage of qualified and motivated buyers so if you find one; you need to have you’re “A" game ready.
Here’s 5 tips to help you prepare and get organized.
1. Assuming you know what the buyer wants.
Buying a business is a unique experience with every transaction unique. Assuming you understand the needs, wants and motivations of a buyer is a bad practice as a smart buyer will not reveal their true motivations.
2. Failing to understand the buyer's objectives and if the business meets their needs.
Assuming you know what the buyer wants is totally different to clearly understanding what the buyer wants to know from you and whether or not this is the right business for them to buy. If you can meet the criteria the buyer gives you…you are on your way even though the criteria may not ultimately be what the buyer says to you.
3. Improper pre-sale planning and failing to be organized
There are so many steps to selling a business. Being organized and having all the right processes in place is a starting point to try and be successful. This includes the legal forms and processes you want a buyer to sign such as a confidentiality agreement, buyers financial statement and buyer disclosure.
4. Answering the question before it is asked
Be careful to understand the question and then provide the right answer. You may be answering a different question than the buyer is asking…and that can be good or bad.
5. Not allowing the buyer to feel some sense of control in the decision making process.
The standard practice is for all parties to try to control the process. Most deals collapse because one party doesn’t understand what or why a question or process is being followed at this point in the transaction. Trust is one of the hardest components to create.
Selling a business requires a lot of patience, making sure it's clear what you are selling, being organized so you can respond to questions and requests for information while at the same time being alert to only answer questions at the appropriate time.
If you would like more information about selling your business, visit my website; http://www.Andrew-Rogerson.com and order a copy of my book Successfully Sell Your Business: Expert Advice from a Business Broker.