Overview of How to Sell a Business
Note: To explain how and why you will benefit from reading and saving this first issue of “How to Sell a Business,” this initial issue has a lot of background information to communicate and is necessarily long. Future issues (every two weeks) will be much shorter.
" Formal education will make you a living; self-education will make you a fortune . " Jim Rohn
Why It's Important to Plan the Sale of a Business
Hopefully, you’ve read our white paper – “Why It’s Important to Plan the Sale of Your Business.” (If you haven’t done so, click the link to read it now.) There are several important points made in the white paper:
Approximately 75% of businesses never sell. Startling, but true! Read Issue #2 – Amazingly Poor Business Sale Statistics for more information. The primary reason businesses do not sell is that business owners fail to realize the need to plan for the sale of a business. When the majority of owners finally decide to sell, their businesses are not salable. Typically, the business represents 50-90% of a business owner’s net worth. If, for lack of planning, you are unable to sell a business, it can be devastating. It takes time to implement changes in your business to prepare for an exit strategy – in most cases at least a couple of years. But, it is never too early to start planning for a business sale.
Purpose of How to Sell a Business Newsletter
The purpose of this email newsletter series, “How to Sell a Business,” is to help educate you on the importance of planning to exit your business. Every two weeks you will receive a new issue addressing a topic related to the need to plan your exit. Think of it as your bi-weekly reminder of the need to plan. And I encourage you to set up a subfolder in your email inbox called “How to Sell a Business,” so you’ll be able to refer to the information when you finally decide to take action.
This newsletter series will cover all preparatory aspects of a business sale including planning, decision making, tax considerations, choosing an intermediary, the sale process, seller financing, deal killers, and other important factors. We identify 66 potential obstacles to the successful sale of a business and the top 33 obstacles each have a full email newsletter devoted to the topic. It is a fact that most businesses are not saleable until obstacles are identified, addressed and minimized.
Theoretically, you should have started to plan your exit the day you started or acquired the business. Realistically, a very small percentage of business owners do that. In fact, based on my experience as a business broker, most small business owners never plan for their exit, and many miss the opportunity to maximize the process of “cashing out” to collect the funds they should have earned from their sweat equity investment.
To Sell a Business, Overcome the Power of Inertia
Why do they miss the opportunity? For many, it is lack of foresight, knowledge and planning. For almost all, it is their inability to “Overcome the Power of Inertia.” The need to “Overcome the Power of Inertia” will be an ongoing theme of this newsletter. Please consider the bi-weekly email sent to your inbox as a reminder to “Overcome the Power of Inertia.”
In physics, inertia is defined as the tendency of a body at rest to remain at rest or a body in motion to stay in motion in a straight line unless acted on by an outside force. It is commonly defined as resistance or disinclination to motion, action or change.
The Power of Inertia is a constant problem for business owners. They get stuck in a rut, doing the same things day after day, and never step back from their business to see the big picture overview. For general business reasons, it’s frequently best to work on your business, not in it. When it comes to selling your business, that approach is crucial.
How to Sell a Business Theme
All too often, owners are forced to sell because some outside force (i.e., declining health, advanced aging, or problems with profitability, employees, customers, and competition) has acted upon them, forcing them to make a decision.
By the time they call a business broker, their companies have been operating in a state of inertia (straight line slightly downhill) for many years. Many times, the businesses have gone so far downhill that they have truly straight-lined (medically speaking) beyond the point of recovery or salability. It’s too late to help them. Unfortunately, for small business owners, this scenario is more common than not.
One of the first and best steps you can take to Overcome the Power of Inertia is to call a broker for a free consultation regarding the sale your business. Many business brokers offer no-charge, no-obligation evaluations of small businesses. They can
- Provide a broker opinion of value
- Help identify your specific obstacles to a successful sale of your business
- Help identify opportunities for improvement to increase the value of your business.
That is a great way to start planning for a successful and profitable sale of your business.
Why do business brokers provide no-charge, no-obligation evaluations? They are interested in developing a long-term relationship so when the timing is right for you to sell the business, you will remember and trust them with that responsibility.
For more information about selecting a trustworthy business broker, read our special report “Insider Secrets To Selling Your Business – Business Broker Best Practices and Selection Criteria “.
"An Educated Consumer Is Our Best Customer" - Sy Syms
In evaluations of companies throughout my business brokerage career, most companies are unfortunately not saleable. It’s extremely discouraging to only have the opportunity to create “an educated consumer” after it’s too late, when the prospective seller’s business had reached the point of not being saleable. In other evaluations, because of obstacles the owner was not aware of, the business valuation was far less than what could have been achieved with proper planning.
The purpose of this newsletter is to fundamentally change the world of our readers. Whereas approximately 75% of businesses are never sold, we believe 75% could be saleable if business owners realized the need to plan for their exit. We want business owners to be “educated consumers.”
Our Goals for How to Sell a Business Newsletter and Website
Our goal is to educate owners about the need to “Overcome the Power of Inertia” – to plan the sale of a business, to improve their business valuation and conquer the obstacles they face in selling a business.
We will provide comprehensive educational content at no charge to small business owners while also helping to enable them to select knowledgeable and affordable advisors, including exit planners, business brokers, intermediaries, and business valuation firms to aid them in the business exit planning process, and ultimately the business sale process.
As a subscriber you will receive a new issue every two weeks on Tuesday mornings. Since I’m a realist, recognizing you might not “Overcome the Power of Inertia” today, please take one simple action today: set up a subfolder in your email inbox called “How to Sell a Business,” so you’ll be able to easily access the information when you do decide to take some action.
" The path to success is to take massive, determined action." Anthony Robbins
Overcome the Power of Inertia
Overcome the Power of Inertia and call a business broker for a free consultation. Many brokers offer no-charge, no-obligation evaluations of small businesses. They can provide a broker opinion of value and help you identify obstacles to a successful sale as well as opportunities for improvement to increase the value of your business. That is a great way to start planning for a successful and profitable exit from your business.
