Putting Your Business up for Sale On Market or Off Market #1

Putting Your Business up for Sale On Market or Off Market

How Too Sell

If you have decided it’s time to sell your business, the question is how you are going to sell, market and value it? Generally, you only have one chance to get it right or you miss out on buyers. Price it too high and you have lost a buyer, even if you drop the price it’s hard to get the buyer back once they have moved on. I think the best way to sell a business it through a third party, that way emotion is not part of the equation, you have got someone that has sold many businesses.

Knows the process, problems that can occur and how to avoid them. It removes the stress and all offers are brought to you to accept or reject. Before a business broker can put a business up for sale a listing agreement must be in place. It is a legal requirement.

On Market Sale

Generally, an on-market sale gives you the best chance of selling your business in the shortest time. An on-market sale is where the business is advertised, but in such a way as to no identify the business. A combination of advertise, brokers in the network, contacts and targets is used to sell the business. The business can be listed as an expression of interest or at a price. Before the business is put on the market an information memorandum (IM) is drawn up and agreed upon.

A listing is drawn up by the agent and agreed upon, the listing contains just enough information to get a prospective buyer interested. When prospective buyers contact the agent, they don’t know the name of the business or the location. Until a confidentiality agreement (CA) is signed, and the buyer is qualified. Only then is the IM sent to the buyer.

Off Market Sale

An off-market sale is where the business is not advertised. A combination of brokers in the network, contacts and targets is used to sell the business. The business can be listed as an expression of interest or at a price. Before the business is put on up for sale an information memorandum (IM) is drawn up and agreed upon. A listing is drawn up by the agent and agreed upon, the listing contains just enough information to get a prospective buyer interested. When prospective buyers contact the agent, they don’t know the name of the business or the location.

Until a confidentiality agreement (CA) is signed, and the buyer is qualified. Only then is the IM sent to the buyer.

How to Make the Sale Easy?

To make the sale easy for you, you need to get all your ducks lined up in a row, I have already posted on this topic. See “When is it time to consider an exit plan when selling a business?” for the details. Generally, an experienced business broker who targets your sector is the best way to go. I have thousands of connections with small business owners and investors. For more information on selling your business please contact me here. Where I can go through the processes of selling your business and you can ask questions.

Putting Your Business up for Sale On Market or Off Market