Selling Businesses in South Florida
Selling a business is decision never to be taken a whim. Rather it should be a well thought out decision as it is probably a once in a lifetime experience. As such, it is almost always a good idea to trust this extremely important event to a professional with the expertise and experience in business sales. Using a professional broker rather than oneself to sell a business is by far the best way to sell a business.
Selling A Business ‘By Owner’
- A ‘for sale by owner’ (or FSBO) is almost never a good way to sell a business.
- First, the business must be valued properly.
- Most FSBO sellers do not have their businesses valued properly because they are unfamiliar with the business sales industry.
- They often massively overprice their business by using dissimilar comps or methods of valuation that simply are not industry norms.
- Or they undervalue their business by not defining and using the correct adjusted owner benefit (or true economic profits) of their business.
- Next, most FSBO sellers do not have an organized and clear set of financials which justify the advertised adjusted owner benefit.
- They will thus be unprepared to engage with a serious buyer who will need to see such financial materials in order to make an offer.
- Lastly, it is nearly impossible for a FSBO seller to ensure the confidentiality of the sales process.
- Without an intermediary between a buyer and the seller, the buyer is bound to know the seller’s true identity prior to signing a Non-Disclosure Agreement (or NDA).
- This can end up causing major disruptions to the seller’s business during the sales process.
Hiring A Professional Business Broker
This first step in selling a business the right way is finding and hiring a professional business broker. There simply is no substitute for experience when it comes to business sales. A business owner should always select a business broker experienced selling businesses within the same industry as the their own business. The right business broker also must have the know how to confidentially sell a business. This means protecting the seller’s identity from anyone who is not properly qualified (and has completed the NDA). The seller should not face any up front fees, and instead signs a listing agreement with the broker.
What Does An Experienced Business Broker Do?
A business broker broker will help a business owner determine how much the business is actually worth. Often, business owners assign value to their sentimental or emotional connection to their business, especially if it’s been in the family for some time. These are factors that should seldom be considered. Instead, a business broker will evaluate the business based on its overall financial health, industry trends, market demand, location and other variables. The evaluation may take some time and will involve carefully going over every detail of the business.
Presenting Business Properly and Confidentially
A business broker should collect all of the necessary documentation and financials of the business in order to create a package to present to potential buyers. He or she will also create an effective advertising campaign and presentation strategy so that the business is marketed properly to the correct target audience. This must all be done confidentially in such a way that the business name, address, specific location, and pictures are not publicly revealed. Further, a business broker handles all questions and communications with potential buyers. This saves the seller valuable time and allows a professional to give the proper guidance to potential buyers.
Always Qualify Potential Buyers
Many buyers are not qualified to purchase a business that they see advertised. Nonetheless, they still inquire about the business and seek more information. A FSBO seller is often surprised at the barrage of people who inquire about their business but have no real intention or financial ability to buy the business. An experienced business broker must qualify every potential buyer by ensuring that the candidate completes and signs an NDA and by showing that they have the financial means to buy the business. This will eliminate the ‘tire-kickers’ or buyers who have no real intent or ability to buy the business.
Hire a Business Sales Professional to Sell Your Florida Company
Selling a business can be a complicated and time-consuming process, one that most business owners do not have the time to handle proactively. While a business owner may excel at running their business or providing a service, most are better off in letting a trained professional business broker handle the sale of their business. Enlisting the help of a business broker will take much of the burden off of the seller and allow for a successful and confidential sale.
If you are ready to sell your South Florida business or create a successful exit strategy, contact Martin at Five Star Business Brokers today for a FREE evaluation of your company.