When you decide that it is time to sell your business there are a lot of things to consider, unfortunately, most business owners are not prepared for the amount of planning that is needed to secure a sale.
On average the chance of you selling your business is 1 in 5, a massive 80% of businesses that are put up for sale fail to find a suitable buyer. The reasons for this are varied and these numbers are compiled from businesses that list themselves on broker sites in the UK and US markets. So this does not include businesses that are sold directly or businesses that are never advertised but either transitioned to a family member or a member of staff.
Just selling your business can be a complex process and is much more complex than any other asset class. which is why many business owners lean on the experience of a broker to correctly market the business to potential buyers.
Steps to take to sell your business through a broker
Here are some steps you can take when selling your business via a broker:
Assess your company’s value
Before you start looking for a broker, you should have a good idea of how much your business is worth. You can look at your financial statements and other relevant documents.
Put your financials in order
Once you know how much your business is worth, you’ll need to organize your finances so that they’re easy for potential buyers to understand.
Find a broker to sell your business
A broker can help you find potential buyers and negotiate the terms of the sale. Make sure you choose a reputable broker who has experience selling businesses like yours.
Understand the charges
Brokers each have a different charging schedule that they use to sell businesses, depending on their market and customer base.
Most charges consist of either fixed or percentages of the sale value of the business and can be either.
- Upfront charges to advertise the business.
- Closing costs, when the sale completes.
Market your business
Your broker will help you create marketing materials that highlight your business’s strengths and attract potential buyers. Marketing materials usually consist of an investment memorandum which is the sale particulars of your business.
Finalise the deal
Once you’ve found a buyer who’s interested in purchasing your business, you’ll need to negotiate the terms of the sale and finalise the deal. The deal structure can be complex or simple depending on the needs of the seller and the buyer.
Remember that selling your business can take time, so be patient and work closely with your broker
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