Business visionaries like Warren Buffet have earned an attractive income buying and selling companies. Even more, entrepreneurs who own companies of varying sizes have made thousands, at times millions, of dollars by selling off a portion of their companies that are positioned to be a better fit for another firm. An example of this is when Eastman Kodak sold the camera and imaging part of its business.
In the case of Eastman Kodak, the firm waited until it was forced to file Chapter 11 in 2012 before it landed a buyer. This points to one of the most important decisions in the sell a business process. To get maximum profits from selling a business, entrepreneurs have to decide to put their business up for sale as soon as possible.
Taking the time to think about why they want to sell a business, what they intend on doing after they stop managing their current business and if they plan to transfer ownership of their business to their children, another relative or an existing senior manager at their firm can help make the decision process less challenging.
According to Punch, “The key to having a profitable sale is to enlist the services of a broker, an accountant and an attorney earlier on to ensure that the businesses are adequately prepared before presentation for sale. Your buyers need to be convinced that they are making the right choice by buying your business. What you are offering them should be the solution they need and should guarantee the right results.”
This shared, entrepreneurs would be wise to consider the needs of their potential buyers before they actually start to sell a business. For example, if an entrepreneur wants to sell a business in the restaurant industry to someone who owns a food truck, they should make sure that their restaurant will readily complement the person’s food truck business.
Showing the food truck owner that the restaurant attracts several hundred diners a day is a good start. In this case, it would also help if the food that’s served at the restaurant was similar to the entrees and snacks sold out of the food truck.
These are just a few of the factors to consider when selling a business. To actually make a profit from the sale of a business, the costs of researching the buying market, confidentially advertising the sale of the business and working with an experienced business broker or advisor like those found at www.tworld.com must be outlined and clearly defined up front.
If entrepreneurs do partner with business brokers, they should vet the brokers, checking to ensure that the brokers know how to properly value companies, reach the right buyers and complete legal filings on time. They should also check to ensure that business brokers don’t have a vested interest in the actual sell beyond wanting the entrepreneurs they work with to yield a profit from the sale of their companies.