How to Sell Your Business Quickly (For the Best Price)
Whether it's from an economic tailspin or just slow business, when large and small business owners alike are forced to sell their company, speed is critical.
Studies show that the average time for selling a business is 153 days. However, five months can seem like a lifetime away if you need a quick sale. That's precisely why having the right exit strategy is crucial; it can significantly reduce the sales process timeline.
The Best Ways to Sell Your Business Fast
As a general rule, most businesses will start preparing for a sale several months or even years before they actually plan to sell. Here are a few strategies to prepare your business so you can make a quick sale.
- Reach out to prospective buyers – As a business owner, you may already know a company or individual that's interested in buying your business assets. Don't wait for them to come to you. Instead, reach out and gauge their interest.
- Inquire internally for an interested buyer – whether it’s with a business partner or employees, you should talk to the individuals involved in your company to see if there is any interest in purchasing business assets from you. You never know, they might be interested in using them for a new business idea or even to continue the company.
- Offer incentives – This is an option for owners that need to sell their business in a hurry. The more attractive the offer is to buy your assets, the less time it will take to find a buyer. Of course, you can lower the asking price, but other options for incentives may include adding intellectual property to the sale, for example. You might also consider including technical training, assisting with the down payment, or seller financing.
Getting the Highest Price in a Business Sale
Giving your assets an unrealistic selling price can lead to a dead-end. Consider similar companies, the economy, the type of business, a prospective buyer’s business model, and your market place when you determine the sale price. On the other hand, you don't want to price your business assets too low. Many owners price low because they want out, but this isn't always the answer. Do your research and consider talking to a business broker or consultant before deciding on a price for your business. Regardless of your asking price, here are a few tips to help you get the maximum offer for your assets:
- Prepare relevant documents – you will want to get your financial statements and records in order, notify your customer base, and organize your business assets. You will also want to create balance sheets of all assets and equipment that you will include with the sale of the business. These steps will help the transition between you and the new owner, as it will help them utilize the assets they purchase to create or maintain a successful business moving forward.
- Consider the best way to find qualified buyers — finding serious buyers for a business sale is no easy task. You will want to consider the most efficient and effective way to attract buyers to a business sale. Auctions are particularly effective in business sales since they market well, attract eager buyers and create organic competition.
- Valuations from similar industries – Just because someone else sold their business assets for several million dollars doesn't necessarily mean that asking price should be the same. You may need to seek out the advice of an expert to determine the correct business valuation for your company and assets. There are a lot of variables that go into determining the value of a business, but an expert will be able to take those variables into account and give you some benchmark figures of your business worth.
The Process for Selling a Small Business vs. a Large Business
When a small business goes up for sale, it's not just potential buyers who are investigating. A smart seller will also have an idea of whether or not a potential buyer is suited for their business, how their business is positioned in a competitive market, and know a realistic asking price for their company.
Whether you are selling a big business or small business, any sale will require careful planning. So, what exactly makes a business small or large?
- Small Business – a small business is defined as an independent business that is managed by its owner or owners in a personalized way and has a relatively small market share. In the U.S., a company with 100 employees or less is usually regarded as a small business. Small businesses are typically easier to set up and lower cost with less government regulation. The owners often have higher motivation for making a business successful.
- Large Business – a large business is defined as one which is managed by owner, owners, or shareholders and has a large market share and provides jobs for at least 250 people. Large businesses are often harder to set up because they require a substantial investment and are required to follow more governmental regulations.
What exactly are the differences when it comes to selling a small vs. a large business? Is there an advantage to one over the other? Well, that depends on what a potential buyer is looking for and whether or not you are trying to sell quickly.
There are two major factors to consider when selling a larger business. The first is that most larger businesses have multiple individuals involved in ownership, which means that all, or at least the majority, of owners need to agree to sell. Similarly, if the company is public, the majority owner must consider the shareholders as well.
On the other hand, many small businesses don't have to deal with shareholders or large ownership groups. The owner typically has the only say in selling or not, and usually has a lot of involvement in day-to-day operations.
Regardless of the size of the business you are selling, be sure that you take all of the legal steps necessary to make the transition a smooth one. A professional auction house can help make that transition smoother and prepare a legally binding purchase agreement.
Doing Your Due Diligence
Due diligence is the process that a buyer goes through to ensure that a business is in the condition they want it to be before they agree to purchase. While due diligence is often associated with a potential buyer, it is not a one-sided process. It is essential that the owner of a business, along with the help of their professional advisors, invest a significant amount of time preparing their business and assets before any potential buyers conduct their due diligence.
While preparation for due diligence can be time-consuming for a business, it is crucial to make sure it's well done, or it can result in the devaluation of your assets and less favorable sale terms. Important information that you should review in preparation include:
- Financial statements
- Inventory and Equipment
- Real Estate or Equipment Leases
- Intellectual Property
- Purchase and Service Receipts (primarily for equipment)
Use this time before the sale to ensure that your records are in order. After all, you don't want a prospective buyer to point out errors.
Weeks Auction Group Makes It Easy
There is a lot at stake when you're selling your business. Not only do you want to sell fast, but you also want to get the most value. More than anything — you want relief from the financial stress of owning a business. But if you don’t know how to sell your business assets, you’re likely experiencing how unbelievably hard it can be. And you’re left drowning in fear that you may never get through this.
At Weeks Auction Group, we believe it should be much easier for business owners to sell their business fast while getting top dollar in the process. We’ve spent over 60 years successfully helping business owners sell every part of their company at the highest value possible. To talk about how we can help you sell your business quickly, contact us today. Don’t continue losing sleep night after night, worried about selling your business. We can help sell faster than you could ever imagine, and you’ll never have to think about it again.