Is it a right time to sell your business, are you selling it in the right place or are you selling it in right time and in good price. These are all no so easy questions when it comes to sell any business. Here is a good article posted by a guest poster on Forbes.
Many business owners wait years to sell their businesses until the market is healthy enough to command a good price. Were in one of those markets now. The International Business Brokers Association (IBBA)s fourth quarter report for 2013, prepared with the Graziado School of Management at Pepperdine University and M&A Source, found that 87% of respondents expected more deals to close in 2014 than last year. More than half of respondents marketing businesses valued at $1 million or more said its a sellers market.
Unfortunately, owners sometimes miss out on opportunities to maximize their selling price, because they are unfamiliar with how the market works. Here are three strategies to reap greater profits from your sale.
1. Look for buyers in the right places.
A recent survey by the IBBA found that for businesses valued from $500,000 to $1 million, 51% of buyers come from a 50 mile radius of their location. In 32% of these cases, buyers are found within 20 miles. However, as businesses valuations rise, other companies or investment firms start getting interested in snapping them upand these purchasers generally arent local. For companies valued at $5 million and up, buyers come from more than 100 miles away in 77% of cases.
What does this mean for you? If you own a business worth $1 million or less, your buyersbesides being localwill likely be first-time business owners, looking to acquire a job. Your marketing materials and sales pitch should address the concerns that corporate refugees may have about maintaining their lifestyle. For instance, these folks will want to see that you can put money into your retirement savings account each year, take regular vacations and enjoy interests outside of the business. If you cant do these things, put people or systems in place that make them possible.
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