Considering Selling Your Business?
There are many reasons you might wish to sell your Michigan business. You may intend to retire. You may wish to seek other opportunities. You may want to capitalize the value you have built in your organization. Whatever your inspiration is, it pays to be properly informed.
Some of the stats surrounding selling your business can be overwhelming:
-An estimated 54% of all business owners expect to transition out of ownership roles over the next decade
-As low as 14% of business owners have an official departure strategy in place
-Just 20% of all businesses listed for sale will sell
-About 50% of all deals in between a buyer and seller will ever reach a close
These numbers clearly show that even though most business owners understand that they will be leaving their business in the near future they are doing very little to prepare for that event. The results of this lack of planning are evident in the percent of businesses that sell and how many business transactions fail.
How to differentiate your business from the pack?
The statistics on deals getting done will only be amplified by the number of businesses that will hit the market increases. The number of buyers will likely not increase as the number of sellers does. This makes it very important for you to differentiate your business from the rest. The way you do this is with planning.
You may be one of the lucky few that sells a business without planning. Even if you part of this small group, you likely will not get the best deal possible and will have to take on more risk in order to complete the transaction.
You may feel like at this time in your life it is pointless to try and sell your business. Even though your business might not be a sellable right now, does not mean that in the next 3 years or less your business can’t be turned into a sellable business.
The first thing you need to do is decide. Decide that you want to sell your business. Decide that it’s time to stop putting off the future. Decide that you want a better outcome then just turning off the lights one last time and locking the door behind you.
Common Mistakes When Selling Your Business
Mistake# 1: Lack of Preparation
Having a plan is critical. Not only does having a plan to give your business a road map for where it’s going, but it will also give you an opportunity to correct problems with your business that might otherwise go unaddressed. Think about getting your house ready for sale: a lot of those little projects get done leading up to it being listed for sale.
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Mistake #2: Over Valuing Your Business
Many business owners are so ingrained in their business and have sacrificed so many things over the years, they believe it to be worth more than it is. Even buyers that express interest in the business will quickly see it’s not worth negotiating for. Working with professionals with transaction experience can give you a realistic valuation of your business but can also provide ideas to increase that value before the sale.
Mistake #3: Lack of Experience
Even an active business owner may only buy and sell a handful of businesses throughout his professional life. Many business transaction professionals will handle more transactions than this in a year. A business owner that believes they know how to prepare their business for sale, list it for sale, negotiate a deal and close that deal on their own are likely to be disappointed. There are so many businesses listed for sale that savvy buyers blow right past those that have numerous issues, are incomplete, or that do not catch their eye.
Are You Ready to Sell?
Selling a business can be overwhelming for some, particularly with all the regular jobs you have, but with enough time, little actions can achieve large things. The first step is meeting with a skilled business attorney to get things going.
If you would like to talk with The Law Offices of Joseph Nafsu regarding marketing your Michigan business, please call us today at 248.388.9798.