5 Secrets for Selling a Business
The Bristol Group has been selling businesses since 2005. With all the businesses sold there are common factors that stand out. We have narrowed that list down to the five most important secrets for selling a business.
1. Clean Books and Record
Having an accurate and complete accounting of all income and expenses related to the business is requirement number one. Management should be using this data to operate the business, make improvements, and stay in compliance for tax purposes. With the help of computers and software, general accounting functions are easier than ever.
2. Strong Earnings and Profits
There are very few business buyers that are looking for distressed financial situations. Most business buyers are investors seeking a return on their investment. Therefore, a company must be profitable and show through historical performance that the company can make money for the owners.
3. Product or Service that is in Demand
The best way to know if you have a product or service is in demand is by looking at the trends. If your revenue and profits and trending up, then there is a good chance the demand is increasing. The opposite is true as well. Said another way, your business must have room for growth and be scalable.
4. Owner Has a Good Reason to Sell
We can bring offers to the table all day long and never complete a deal if the business owner doesn’t have a genuine reason for selling the business. In order to have a sellable business you must be a motivated seller. In addition to that, every business owner should have a plan for the next phase of their life after they sell the business.
5. Owner is Flexible on Selling Price and Terms
We tend to focus much of our attention on the Selling Price of the business. But we should not ignore the other terms and conditions associated with selling a business. Business owners need to approach this process with an open mind. They need be flexible – even creative and times – to make a deal work.
For more information about this topic and many others, contact Bristol Group to speak with one of our advisors.
To Learn more, contact the Bristol Group
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