Question: How Do I Sell My Business Successfully?

How can I sell my business fast?

The seven steps to sell your business fast:Prepare a Business Summary.Market your business aggressively.Screen buyers and email them your Business Summary.Meet with qualified buyers and screen them appropriately.Accept an offer.Manage the due diligence process.Handle the closing..

What is the rule of thumb for valuing a business?

The most commonly used rule of thumb is simply a percentage of the annual sales, or better yet, the last 12 months of sales/revenues. … Another rule of thumb used in the Guide is a multiple of earnings. In small businesses, the multiple is used against what is termed Seller’s Discretionary Earnings (SDE).

Why would someone sell a profitable business?

The most common reason a business is sold is due to fatigue, boredom, and burnout. The ongoing, daily grind of managing small business stressors can be very tiresome. Beyond the actual stress, many owners simply sell because they are no longer challenged or interested in the business’ operations.

What does selling a business mean?

Definition: The process of putting your business up for sale by an individual or other company. Just as you needed a plan to get into business, you’ll need a plan to get out of it. Selling or otherwise disposing of a business requires some forethought, strategizing and careful implementation.

Why is my business not making money?

If you’re not pricing with profitability in mind, it doesn’t matter how many sales you make—you’ll never make a profit. Your product isn’t viable. It’s important to test the market and validate your idea to make sure it’s something enough people will buy. You’re attracting the wrong customers.

Should I sell my business or close it?

Ideally, this is a process that is considered at the earliest stages of the business – at start up, even; or when the current owner buys it – but in no event less than three years before the owner begins looking for a buyer. But even if you don’t plan, you should always think of selling before closing your business.

What is the first step to selling a business?

10 Steps to Selling Your Company from Start to FinishStep 1: Define the Owner’s Goals and Potential Exit Strategies. … Step 2: Determine a Range of Value. … Step 3: Enhancing Value Prior to the Sale. … Step 4: Gather Financial Information; Present Financials. … Step 5: Compile Due Diligence Information. … Step 6: Target Buyers. … Step 7: Qualify Potential Buyers. … Step 8: Negotiate the Deal.More items…•

How much can you sell your small business for?

There is plenty of room for judgment, but by and large, a profitable, reasonably healthy, small business will sell in the 2.0 to 6.0 times EBIT range, with most of those in the 2.5 to 4.5 range. So, if annual cash flow is $200,000, the selling price will likely be between $500,000 and $900,000.

How do you value a small business?

There are a number of ways to determine the market value of your business.Tally the value of assets. Add up the value of everything the business owns, including all equipment and inventory. … Base it on revenue. … Use earnings multiples. … Do a discounted cash-flow analysis. … Go beyond financial formulas.

What do you do with your money when you sell a business?

Minimize Your Taxes on the SaleStructure the Transaction Beneficially. … Seek Capital Gains Treatment. … Take a Loss on Other Investments. … Consider Tax-Free Investments. … Remember Charitable Donations. … Consider Gifts. … Max Out Your IRA or Other Retirement Plan Contributions. … Prepay Your State and/or Local Taxes.More items…

What are the seven steps to selling a small business?

Make selling your small business easy with these seven steps.Determine the value of your company. … Clean up your small business financials. … Prepare your exit strategy in advance. … Boost your sales. … Find a business broker. … Pre-qualify your buyers. … Get business contracts in order.

How many times profit is a business worth?

Bizbuysell says, nationally the average business sells for around 0.6 times its annual revenue. But many other factors come into play. For example, a buyer might pay three or four times earnings if a business has market leadership and strong management.

Is reselling a good business?

Lower Financial Risk: A benefit to starting a reseller business is that the financial cost is low. … You can choose to price your products anyway you want. Since the cost of goods is low, you can price your products to ensure your reseller business is profitable. The higher you set your price the more you can make.

How do you approach a business owner for selling?

Do your research before you contact another business owner about selling, as it will improve your chances of a successful transaction.Pay a Visit. Start your inquiry with a visit to the establishment. … Conduct Research. … Make Contact. … Prepare. … Calculate the Value.

How can I promote my business?

7 Ways To Promote Your Business Online For FreeUse the three big local listing services. … Embrace social media. … Start a blog. … Put up multimedia on YouTube and Flickr. … SEO your company website. … Press releases. … Join a relevant online community and contribute.

How do you sell a business that is not profitable?

The owners may attempt to sell an unprofitable business in an effort to recover some of their costs.Estimate Its Value. The value of a business can be measured in ways other than its profitability. … Negotiate From Strength. … Prepare for Due Diligence. … Select an Offer.

When should I sell my small business?

Generally, business owners should look to sell because they want to make a lifestyle or professional change. Don’t sell when the market is in a downturn: The value of your business is correlated to the market within which it operates – therefore, you should look to sell when business is good, not bad.

What is the best website to sell your business?

8 Places to Find Businesses for Sale OnlineBizBuySell.com. … BizQuest.com. … BusinessBroker.net. … BusinessesForSale.com. … BusinessMart.com. … DealStream.com (formerly MergerNetwork) … Franchise Gator. … LoopNet.com.

What product can I sell to make money?

10 Best High Profit Products To Sell Online To Make MoneyWireless Phone charger. Wireless phone chargers have becoming a lot popular in the last few years. … Dog Collars. … Watches. … Shapewear. … Baby Toys. … Earbuds. … Maxi Dresses. … Phone case.More items…•

How long does it take to sell business?

6-9 monthsIf you speak to business brokers and industry leaders they will say it takes 6-9 months to sell a business on average. This is a statistic based on the businesses that actually do sell. There are also worrying statistics that state 80% of all businesses that hit the marketplace don’t actually sell.

What happens when businesses are not profitable?

Losses resulting from business operations have the opposite effect of profits. Companies facing a reduced market share from lower consumer demand or a downturn in the business cycle may be forced to reduce operational output. Consistent business losses may force the company into bankruptcy.