In this comprehensive guide, we will outline the steps involved in selling a small business without a broker, providing tips and strategies to help you achieve the best possible outcome. Closing the deal – assisting with the legal and financial aspects of the sale, including drafting the sales agreement and facilitating the transfer of ownership. Once you’ve identified a potential buyer, you’ll need to negotiate the terms of the sale. This can include the purchase price, payment terms, and any contingencies or warranties. It’s important to screen potential buyers carefully to ensure that they are qualified and serious about purchasing your business.
Don’t underestimate the amount of work involved in exit planning and selling your business. From the mountain of financials and paperwork, through business valuations and pricing, to marketing the sale and vetting buyer inquiries. And once you’ve received reasonable offers, there’s due diligence and negotiations.
Step 1: Understand the Value of Your Business
Even if you are selling to a close family member or employee, rushing through the sales process is not advised. However, if a relatively quick turnaround is needed, hire a business broker to speed up the proceedings. Brokers provide the valuable inside perspective that sellers need to understand their options and plan accordingly. After all, you don’t want to see a once-in-a-lifetime deal slip away—nor do you want to see your beloved business in the wrong hands.
- The owner will need to research buyers, manage negotiations, and handle other administrative tasks related to selling the business.
- It may also be possible to receive free counseling from organizations such as SCORE, and your local chamber of commerce may offer relevant seminars and workshops.
- If you’re ready to get into the process, start by creating a free BizBuySell account.
- Settling for a “lowball” offer could hurt for years to come as you’re forced to put off retirement or other ventures.
- After all, you don’t want to see a once-in-a-lifetime deal slip away—nor do you want to see your beloved business in the wrong hands.
- By following the step-by-step process outlined below, you can successfully sell your small business on your own.
- The final step is to close the deal and transfer the ownership of your business.
Business brokers keep deals moving forward by taking some of the load off your other advisors. Brokers do much of the negotiating with the buyer, as well as coordinate deliverables and due dates. You will need to do this yourself with help from your attorney and CPA. The valuation will be a benchmark from which to set a reasonable asking price for the business and judge incoming offers. The fate of your employees will depend on the terms of the sale and the buyer’s plans for the business. It is important to communicate with your employees and ensure that they are aware of any changes that may occur.
Calculate based on revenue
If you’re on the fence about whether or not to work with a business broker to sell your business, feel free to contact the advisors at Allan Taylor & Co. There’s no charge, and no pressure, to get our initial thoughts on crypto exchange vs trading platform your business and goals for a sale. Be sure both advisors know about your plans to sell your business yourself. Make sure your CPA knows that you will need to respond quickly to due diligence requests from the buyer.
When you sell your business without a broker, you may have limited resources and networks to draw on. Business brokers have access to a wide range of resources, such as databases of potential buyers, legal and financial experts, and marketing materials. They also have a network of contacts in the industry who may be interested in purchasing your business.
STEP 4: Keep the Sale of Your Business Confidential With an NDA
You’ll also need proof that you own all the assets included in the sale. If your business hasn’t been around that long, then provide all your financial history from the start of the business. In addition to having https://www.xcritical.com/ the power to outmaneuver the average seller, these savvy investors also know how to leverage seller fatigue. This could result in you accepting hundreds of thousands less than your business is actually worth.
Working with a broker can also make the process smooth and simple for business owners and potential buyers alike. Once due diligence is completed, it’s time to sign a binding agreement and close the deal. During this process, you’ll need to negotiate the final details of the sale, such as price and terms. It’s important to remember that negotiation is a two-way street and that both parties should come away feeling like they’ve gotten a fair deal. You can post an advertising listing on Raincatcher’s Sell By Owner listing website and other sites.
Finding Potential Buyers
It ensures that all of the paperwork is handled properly and each party is protected. Create a shortlist of businesses that are similar to yours – not just the same industry, but that have similar profit and turnover to yours and are roughly the same size. Even if it’s not a number you want to advertise widely at first, you should have an idea of how much you want to charge for your business. We actually built this business valuation calculator that you can use for free to find out how much your business is worth.
You may find yourself at a severe disadvantage when it comes to getting the best price possible for your business when you’re up against these professionals. Another way you might be able to protect yourself somewhat is by having prospective buyers sign a non-disclosure agreement (NDA) as well as a non-compete agreement (NCA). You may find drafting enforceable NDAs and NCAs difficult without legal advice, and if you come across international buyers, it may be nearly impossible. You might not be able to sell your business on sites such as LinkedIn, but you can use connections on these sites to put you in touch with prospective buyers who might be interested in your business. On the other hand, a financial buyer is usually an investment firm or venture capital firm.