Selling a business? Here is what you need to know

Written By Steps To Faculty Published May 28th, 2010

It’s never easy selling a business; or, to be more accurate, it is never easy to sell a business at a price that will allow you to profit from the venture to the fullest extent possible. Given this, any business owner can do well to keep a few points, or steps, in mind.

Step 1 create a bidding war

When you sell a business, you have already put a lot of time and effort into that business; you want to gain something back for all the late hours spent on Friday evenings or for all the tough purchasing decisions you have to make that drew funds away from family vacations or from the new upgrades to the house. With that in mind, it is always a bad idea to limit the number of possible purchasers. If possible, invite as many people as you can into the bidding process; let them know what is at stake and trumpet the things that made your business a viable business in the first place.

Step 2 know the needs of the prospective buyers

When people signal an intention to buy something, they clearly believe that whatever it is they are looking into is something that meets – or can meet – a demand they have. As much as you can, you need to know what their needs are and the ways in which your business can meet those needs. In effect, not only are you selling a business, you are also selling people on how that business can help them. In a related vein, it never hurts to know the long-term ambitions of your prospective buyers because maybe they have a long-term objective that your business can help them realize in ways they could not have imagined without you pointing it out to them.

Step 3 Sell from a position of strength

Whenever someone is selling a piece of real estate or land, it is considered ill-advised to sell that land at a low price when it cost more to buy the land in the first place. Likewise, if you are selling the family farm, selling during a time when agribusiness is in the doldrums is never as beneficial as selling when demand is high. Thus, as much as possible, try to get out when things are riding high; when you are desperate, buyers know it – and they act accordingly.

To close, there are a few basic fundamentals to selling a business: firstly, create a bidding war; secondly, know what your buyers want; and, thirdly, sell on your terms and on no one else’s. Follow these simple steps, and you will discover that selling a business can be a lucrative business and one that rewards you for all your hard work of the past.

Roger Due

Investing in Your Destiny® & Coaching Program - Wealth Building Summit Dallas, Texas

My name is Roger Due and I am from Albuquerque, New Mexico and I am the owner of the Monsano software company. This has been an absolutely fantastic conference. This is the best I have ever been to.