If you’re looking to sell your business, people will tell you that you need a business broker to get the job done for you. This is not necessarily the case. More and more company owners are selling their businesses by themselves and cutting the middleman out of the transaction.
However, if this is the route you choose to go, you must be prepared to put in a lot more effort as you will effectively be acting as your own broker. Here’s some important information you need to know:
Why cut the broker out of the transaction?
Selling your business is a lot easier today than it was even twenty years ago. With the internet dominating how people shop, you can reach a much bigger pool of potential buyers by advertising online. Whereas you would have been reliant on a broker with their little black book of contacts, you can now do it yourself.
Brokers charge 8% to 10% of the final sale price as their commission, and some even demand money upfront to get the ball rolling to sell your business. Eliminating the broker from the equation allows the business owner to keep the full sale price.
How to go it alone
When you browse websites that advertise houses for sale, you’ll see that they usually have a section for businesses for sale too. Some sites specialise exclusively in the sale of businesses. Go through these sites to see where people with businesses like yours are advertising, as this will guide your choice on where to start.
Do the work in advance when it comes to paperwork. Have all your documentation ready to show any potential buyers. Also, take the initiative to draw up a sale contract. Net Lawman boasts a vast collection of legal documents for you to download and edit to suit your needs. You can also opt to run your contract past the company’s legal team to make sure it’s watertight and legal.
Write a compelling advert
When you advertise your business online, you’ll need to give details about it in a compelling way to persuade buyers to express an interest in it. Most sites require you to upload some photographs as well.
When writing your text, be succinct but also ensure that the reader feels they know enough to decide whether they’re interested in approaching you.
Think about what you want to say in your advert well before you log onto a site and start writing. There might be a character limit, which will affect how much you can say.
If you’re not sure where to start, look at businesses like yours for sale and see what they included in the advert. It will either show you what to do or what to avoid. Include an anonymous email address for respondents to use should they want to contact you.
Set the price
Most people will tell you that the most vital task the broker performs is placing a value on your business. True, they have more experience at this, but it’s not like they have a secret formula for working out how much your business is worth.
You can advertise your business sale price at any number you like, although you need to be realistic if you want to make a sale. You can’t negotiate up, so always start a little higher. You can calculate your business value by multiplying your annual profits by three or five, whichever one you feel is fair. Look at what others are charging to give you an idea of how to value your business and set a price.