How quickly can (or should) I sell my business?
- Tuesday, 24 January 2023
- Written by Ashley Kelsey
In a perfect world, every entrepreneur would have ample time to prepare their business for sale. It’s a long, often complex process that demands our full attention — and ideally, assistance from professional brokers.
After all, there are many factors to consider: Why am I selling? Is the market ideal? Do I have my legal and financial ducks in a row? (And more.)
That being said, there are certainly times when a speedy sale is essential — or unavoidable. Life can change in a moment, and when an urgent situation demands your attention, it helps to know that there are business advisors available to help facilitate your business’s sale with haste and precision. This is especially applicable to the fast-moving market that emerged during the COVID-19 pandemic.
Why Sell Quickly?
If you find yourself in a situation that calls for a quick sale, you’re not alone. Advisors have helped many clients accelerate the process — and for many different reasons.
- A sudden change in personal circumstances. An unexpected illness or even a death in the family, divorce, and partnership disputes have compelled many clients to sell quickly.
- Favorable (or unfavorable) market changes. Whether they affect your vertical as a whole or your business’s individual profitability, market changes frequently kick-start the sales process.
- New (and potentially profitable) opportunities. Perhaps you’ve found an exciting new venture and need to hand off responsibility — or you need to find more capital quickly.
Selling quickly is also just plain trendy. BizBuySell.com reports: “[the] median time to sell dropped 23% from its peak of 200 days in Q2 2012 to just 153 days in Q4 2014.” That’s the lowest sale time recorded since they began tracking in 2007.
With any business sale, there are certain steps that need to be taken to protect you and your business. With an expedited business sale, these steps are still essential — but now, with everyone moving twice as quickly, there’s more room for error. That’s where business brokers come in.
- Brokers find and vet potential buyers. Once your business goes up for sale, you’ll likely receive a flurry of requests for more details. Advisors will field these requests and share only the essentials, all the while keeping your business’s important information confidential.
- Brokers prepare your business for sale. While you do the important work of keeping your business running and profitable, we gather the information needed to value and list it confidentially — plus important documents regarding your financial obligations, legal obligations and due diligence. We work with your advisors to facilitate a successful transaction.
- Brokers screen negotiations and paperwork. Don’t be taken in by a seemingly perfect buyer. If it seems too good to be true, it probably is. Advisors typically have decades of experience and know what’s normal in a deal, when to accept an offer, and when to die on a particular hill.
Ways to Expedite Your Sale
Having a trustworthy business broker at your side to facilitate a quick sale is the best thing you can do when time is of the essence. However, there are also many steps that entrepreneurs can take themselves to make their businesses attractive and speed up the process.
- Target the most likely buyers. This seems obvious, but many clients forget to look in their own backyards. The best buyers for your business could be the people in your industry, old business connections, and maybe even former rivals and competitors.
- When looking for buyers, cast a wide net. You never know where your buyer will come from. You may be surprised to find buyers in unlikely places. Keep an open mind and trust your broker’s reach, which usually includes a database of thousands of contacts.
- Sweeten the deal by adding incentives for potential buyers. We don’t just mean lower prices (though everyone loves a deal). Try throwing in financing options, equipment, and other bonuses to attract interest and show you’re serious about selling your business quickly. Local business advisors have teams of knowledgeable, professional advisors who know how to structure deals to get the transaction completed.
If you need to sell quickly, you absolutely must have an experienced broker to facilitate the process. Errors can slow you down and waste your time and even lose a highly qualified buyer. Remember, a good deal dies when you don’t have the professional guidance needed to navigate the next steps. Don’t get caught without an advisor who knows their way around preparation, negotiation, and closing.
Business advisors can help take the stress out of selling your business so you can focus on your exit — whatever that may look like for you. It’s impossible to put a price on the peace of mind that comes from knowing you’re covered — financially and legally — as you see your business off to the next phase of its life.
Editor’s note: Ashley Kelsey is a Business Broker at Transworld Business Advisors of Eastern North Carolina. For more information call 910-302-6447 or visit www.transworldeast.com.