If you have ever sold a home, you can sell your business
Owning a business in a small town has many benefits, but one of the drawbacks is the difficulty of finding a buyer for your business when you decide it is time to move on. The pool of potential acquirers is smaller and capital for buyers is harder to find. But if you understand the process of selling a business, then you can take steps to minimize the barriers to selling your company.
Selling a home and selling a business are remarkably similar tasks. If you’ve ever felt intimidated or confused about the process of selling your company, just think of the transaction in the same way you would if you were selling your home. This is the second in a multi-part series. Read part 1 now.
Step 2: Find an agent
Once you have readied your house for sale, the next step is to find an agent to sell it. Sure, you could sell it yourself, but selling a home is a big financial transaction, and typically an agent earns his or her commission by working to market and sell your home to a broad range of potential buyers.
Selling your business can be an even larger transaction so having a broker represent you professionally is important. A brokers job is to run the selling process so you can keep focused on your business.
So how do you find a broker if your business is in a small town?
Most business brokers work from cities with a population of at least 100,000 so you will need to target your search to the closest city. Brokers work on a commission so before they will be willing to drive to your town to meet with you, they will need to know your business is large enough (and therefore their potential commission big enough) to warrant driving out to you.
What’s big enough? I spoke to Brad Bottoset the owner of Reno-based business brokerage The Liberty Group of Nevada. Brad’s firm often represents sellers from small towns and one of his latest listing is in Fallon Nevada (population: 7536).
“If you have a business with at least $50,000 in profit (after you have pulled out a fair market salary and benefits), it will be worth it for a broker to drive to your town.”
Bottoset explains, “given the recession, the number of good, profitable businesses for sale is down. Business brokers are hungry to represent good businesses and will be happy to drive to a small town to represent a profitable company”.
Next time, we’ll look at step 3 in selling a house or a business: creating the marketing materials.
John Warrillow is the author of Built To Sell: Turn Your Business Into One You Can Sell. Find out if you have a sellable business – and what you could get for it – by taking the 10 question Sellability Index Quiz at www.BuiltToSell.com.
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Becky McCray says
Twitter friend @BlatzLiquor shared this comment:
I worked as a business broker.. can’t stress enough NOT to pay any fees before biz is sold!