Hiring a business broker San Diego is the first thing you should do when getting ready to sell a business. This is for the simple fact that the input of a broker paired with his professional network will help sell fast, to the right buyer and for the best possible price. However, even when working with a broker it is imperative that you do your own research. In this post we shall be looking at the key questions you should answer before moving forward with the sale.
Have you determined the exact worth of your business?
Determining the worth of your business means you need to get professional business valuation. A lot of work goes into business valuation and you need the right expert to help determine the exact value of your business. Some business brokers San Diego offer free valuation services. The best thing about getting a detailed business valuation report is that it will help set an accurate selling price and also help you win potential buyers over.
What is the health of your industry?
Honesty is the key to winning the trust of buyers when selling a business. Giving vague information with the aim of tricking a buyer into purchasing your business will only end with lawsuits or buyers not trusting you. Knowing the health of your industry will help determine if it is the best time to sell. For example, if the industry is in a transition period, you may be better off waiting until a better time to sell comes.
Have you found the right and qualified buyer?
The last thing you want is to waste time with a buyer who is not serious about buying your business. This is where the need to prescreen buyers comes in. The best thing is that your business broker San Diego will be happy to help with buyer screening. He will not only help you determine if the buyer has the finances to acquire your business but also make sure the buyer’s interests align perfectly with yours.
How do you want to get paid?
It is also a good idea to think about how you want to get paid. Are you willing to offer seller financing? Understanding how you want to get paid and how flexible you can be with the terms of payment is crucial before listing your business.
The sale of a business is not something you should rush. Experienced business brokers San Diego know what it takes to successfully sell a business and they will be able to help you answer these questions.
Hiring an experienced business broker Orange County is the first step to selling a business for maximum profit. However, it is good to note that the broker will not do everything for you. You, the business owner, have a part to play in order to command the highest possible price for your company. In this post we will be looking at the three things you need to do to increase the overall value of your business.
Focus on increasing the cash flow
Something that almost all experienced business brokers Orange County know is that potential buyers always focus on the cash flow when determining the value of a business. Buyers calculate the value of the business by estimating the future cash flow and assessing the associated risk that comes with generating that cash flow. Business with a track record of growing or sustainable cash validate their products/services are great and also demonstrate that the management team is able to drive growth. As a result such a business will be more attractive to potential buyers.
Put yourself in the shoes of buyers
The best way to evaluate the suitability of your business for sale is to put yourself in a buyer’s shoes. There are five areas buyers scrutinize the most when buying a business:
- Strategic planning. A well written plan gives a buyer the confidence that a business owner knows where the business is going and how to get there.
- Strong management. Widely knowledgeable and properly trained management team makes a business more desirable.
- Diversified and recurring revenue base. Your business should not generate more than 30% of its revenue from a single client. Buyers are interested in businesses that have multiple clients.
- High barriers to entry. Buyers want to purchase businesses that are unique. You can create barriers to entry through having intellectual property like trademarks, patents, economies of scale, customer loyalty, distribution or supplier agreements and significant capital investment.
- Scalability. Scalable, measurable and repeatable processes make a business more attractive to buyers.
Pick the best exit strategy
Another thing you need to do to make your business more valuable is to pick the right exit strategy. When and how you sell will determine how much you end up making at the end of the day. An experienced business broker Orange County can help plan your exit and help with execution. He will also help you time the sale perfectly.
While the role of business brokers Orange County is to help you close fast and sell for maximum profit, it is your job to get your business sufficiently ready. Liaising with a broker when getting ready to sell will increase your chances of success.