Every day small business owners make the decision to sell their business. Sometimes planned and sometimes not, businesses get sold for various reasons. Here are some of the reasons that an entrepreneur plans the sale for:
- Desire to retire
- Relocation
- The want for a lifestyle change
- The next generation is not going to take over
- Desire to pursue other business opportunities
Other times the sale of a business can be unpredictable and often sneaks up on the owner. Some examples of that are:
- Health issues or health scare
- Family illness
- Increased competition
- Family Disputes
- Divorce
- Burnout
- Disputes with partners
- Losing a Key employee
- Losing a major customer
- Divorce
Since we never know the right time to sell our business, we always want to be ready. A well-planned exit strategy will come in handy when the time comes.
The selling process is straightforward and in general is structured as follows;
1. You make the decision to sell.
2. Decide to hire a professional to assist in the selling marketing, process and paperwork.
3. Get a valuation or Comparative Market Analysis on the business. This will tell you what the business is expected to sell for.
4. A Confidential Business Review is written on the business. This contains all the facts and figures of your business.
5. Potential qualified buyers are sought out to assess and look at your business in a confidential manner.
6. Price and terms are negotiated for the business.
7. An asset purchase agreement is executed between the seller and the buyer outlining all the specific terms, price, and conditions of the sale.
8. There is a Due Diligence period allowing the buyer to verify that all the records and contingencies are what was expected.
9. Business assets are transferred.
10. Help to train the new buyer to run the business.
A question that is often asked is how long it takes to sell a business. There is no exact answer to this question as the time depends on the individual business and the terms of the deal. The historical data shows that on average it takes 8 – 10 months to sell a business. Some businesses sell in weeks, some take months. Price is a major determining factor.
Buying or selling a business is a very involved process. If you are considering buying or selling a business, I would suggest a meeting with a Business Broker. I welcome you to contact Central Florida Business Brokerage at [email protected] or call us at (407)261-9001.
