Selling for maximum profit is definitely your goal when you set out to sell your distribution business. The problem is realizing this goal is never easy. In addition to involving an experienced business broker for distribution companies Orange County stands behind, there are a couple of things you will have to do on your part. In this post, we will be looking at the key things you must do when getting ready to sell your company.
Address issues that could scare potential buyers
Even when the financial records are perfect, business buyers always keep an eye out for red flags. They use the red flags to either avoid investing in a bad business or to use them to their advantage during negotiations. With your goal being to sell your business for maximum profit, you need to make sure there is nothing that can scare off buyers. Working with an experienced business broker for distribution companies Orange County counts on will help you review the issues you must address before getting your business listed.
Some red flags that may scare off buyers or put you at a disadvantage during negotiations include the following:
- High revenue concentration in a handful of customers. To solve this issue, you need to diversify your customer base.
- Outstanding lawsuits. All legal risks must be addressed.
- The success of your company depends too much on you, the owner. The solution here is to train an individual or team to take over your responsibilities. You also need to document all your systems and processes.
- Excessive debt
- High employee turnover
Understanding your strengths and weaknesses will help achieve better results when selling your business. Do a complete review of your business and come up with a plan to improve what you can.
Be ready for a business sale process that may take longer or go faster than you planned
It takes about 6 to 10 months to sell a business. There are certain things that can happen and cause the sale to conclude within less time. Other conditions such as setting a price that is too high can keep you from selling at all. Don’t use emotions to set a selling price. You need to rely on solid data. Keep in mind buyers will have time for due diligence. If they determine that your price is too high, they will walk away. When that happens, the sale will be delayed. Companies that have a large customer base or significant net income tend to sell faster. It is always good to be prepared for a range of timelines. Getting everything ready in order to speed up the process.
There are so many moving parts during the sale of a business. The best thing you can do is build a great team to help with the sale. Start by hiring a business broker for distribution companies in Orange County that has an impeccable track record.