It is especially challenging to sell your business in today's market, when the marketplace is flooded with defaulting businesses that can be purchased for a fraction of their past value. Moreover, because getting an acquisition loan is practically impossible, purchasers expect the sellers to carry a substantial note for a part of the purchase price. Even solid businesses that make very good money may be treated similarly by the buyers today.
Remember that you are competing with all other businesses for sale. So, what should you do to successfully sell your business under current business market conditions? Like with selling a product, if you want to get ahead of competition, your product should be more attractive and marketed better than of your competitors (other businesses on the market).
1 First and foremost get all the help you can get. Even if you've sold several businesses in the past, today's market is different, and requires up-to-date knowledge of the marketplace. Prepare a team of knowledgeable professionals: business broker, accountant, business lawyer that you can use as needed. You don't need mediocre help - you want the best professionals you can find.
How to find them? Talk to your friends and other business owners. If they know a good accountant, get a referral and, most likely, he can refer you to a good business broker, and so on. Start with finding a good business broker because his services, most likely you will need the most. Good business broker shoud know other business professionals and will refer you to them, if needed.
2 Next, prepare your business for sale. I can't overstate importance of this step. Well-prepared business will sell faster and for more money. Think of selling a house, for example. In order to attract buyers you will put a fresh coat of paint, scrub the appliances and power-wash the driveway. If necessary - painting grass green. Same principles are applicable to selling a business. Obviously, financial performance is the most important factor, so you have to start there (we will discuss it in more details below). However, what real estate people call 'curb appeal" is also very important. Wash windows, replace door mat, try to create some impression of order on your desk, etc...
3 Prepare financial records. Put yourself in the buyer's shoes. Will you be satisfied with your quality of records if you decided to buy a business? If the answer is "no", roll up your sleeves and start putting your house in order. Nothing impresses buyers more than well-organized records. Nothing disappoints them more than not being able to get answers to financial and other important questions. Don't expect buyers to come in and start looking around and get impressed with everything that you've accomplished. They don't care much about how you got where you are. Remember, there are plenty of other businesses on the market with very good, clean records and you're competing with them. While preparing your financial records, please remember that your objectives while running the business are quite opposite of those to sell the business. You want to minimize your tax liability as much as possible while running a business, yet show as much income as possible while selling it. Discuss this situation with your business broker, preferably two-three years in advance.
4 Get prepared for due diligence. You may be a very trustworthy person, however buyers won't entirely trust your verbal statements. REMEMBER THIS RULE: You can't claim income or expense that can't be proved. Proof not necessarily should be on tax returns. It may be customer invoices that can be verified, or gasoline receipts, or electrical bill or anything else that in your business field may be considered a proof of sale of products or services. Experienced business brokers are usually very good at finding a suitable proof of income. For example, income of coin laundry can be calculated by checking the electric meter. Knowing how much electricity per cycle each washer and dryer consumes, it's very easy to calculate number of washing/drying cycles and, therefore, total income numbers.
5 Make your business easy for the buyer to take over. Detach yourself "personally" from the business as much as possible. Buyer doesn't care much about how great you are with the customers, but rather will the customers stay when he takes over. Regardless how much goodwill your business has, it won't be of any value if "you" are the goodwill. They are not buying you, they're buying business without you. The lesser is your personal goodwill value, the higher price you can get for the business.
Even if some of the above requirements were neglected it can be all turned around with the help of knowledgeable business broker. However everything takes time; the earlier you start the greater chance to improve your business and sell it faster and for more money.