How To Sell A Small Business Without A Broker

Published on: 27 December 2019 Last Updated on: 04 September 2024
sell your small business

Once you’re ready to sell your small business, hiring a business broker tops your list. An article from this perfectly defines the role of business brokers that is to act as “intermediaries between buyers and sellers of a business”. They are the equivalent of real estate brokers or agents who sell properties on behalf of property owners.

Business brokers manage everything necessary to sell your small business, from planning to marketing to closing the deal. Some even assist during the transition process. Considering such an enormous task, enlisting a broker may seem the easiest and most convenient thing to do. However, their service comes with an outrageous fee, usually around 10% commission from the sale. This is certainly a huge cut from your profits.

If you want to retain the full profit from the sale, you can opt to sell your small business sans middlemen. This is an excellent choice especially if you have previous experience selling a business, you know of prospective buyers, or you’re not in a hurry to sell-off. However, when you decide to sell your business on your own, you have to be ready for a tedious legwork.

So, how do you go about the sale?

Know your reason for selling the small business

According to a business broker, the first thing that a buyer would want to know is why a business is being sold. For a business to attract a potential buyer, you need to have a good reason.

Some of the common reasons are retirement, sudden changes in personal circumstances, illness or death, boredom, partnership disputes, and burnout. Prospective buyers find these as ‘attractive’ reasons to buy a business.

It may be harder to sell a business if you tell the buyer that you’re selling the business due to its sorry financial state, persistent losses, lack of manpower, and changing market conditions and trends.

Make your business easily marketable by timing your sale properly. Show positive attributes to make it more marketable such as a strong customer base, increased profitability, consistent good financials, well-defined business processes, and a good contract.

Plan your sale

Prepare your business at least two years ahead of the sale, especially if you won’t enlist a broker. Have an ample amount of time to improve your client base, business structure, and financial records. This will help improve the value of your business and make it more attractive to buyers. This should also help ease the transition process.

Get your business appraised 

get business appraised 

Once you’re ready to sell, you need to decide on the worth of your business. It is best to work with a professional business appraiser to get a proper valuation. Often, business owners become illogical when it comes to evaluating their own business. Some price is too low in an attempt to make it more marketable but end up losing on potential profit. Others price it too high hence making it unattractive to potential buyers.

A business appraiser will evaluate your business to determine its worth. He then prepares a detailed explanation to give credibility to the proposed price.

Prepare all documents

preparing documents

Give time in preparing the design or sales package for your business. This document represents your business in the best possible light to potential buyers. It should include financial, operational and marketing information. If you are not comfortable with your communication skills, you can enlist the help of professional business writers.

Financial documents are an important part of the sale process. Gather your books of account, financial statements, and tax returns for the past four years. Review these documents with an accountant. In addition, develop a list of assets that are being sold along with the business. Include other necessary documents such as lease agreements, supplier contracts, and contact lists.

Prepare an information packet or operating manual that provides an overview of your business processes. In addition, you want to add photographs of your business, testimonials, case studies, and customer profiles. Highlight accomplishments and milestones to make it more marketable and command better-asking price.

Prepare your business on-site

Alongside the documentary preparations, you should also make your business site presentable. Check your physical store, production site, warehouse, and other related locations. You might need to have some areas repainted or redeveloped. Check if equipment or machinery needs to be replaced or fixed before the sale. Investing in such developments can help improve the asking price.

It might sound cliché but first impressions last. An unkempt and dilapidated business site might turn off a potential buyer. It pays to invest in your physical asset as soon as you decide to sell on your own.

Look for a buyer to sell your small business

Finding a buyer is difficult, but it becomes doubly challenging if you don’t have a business broker. Unless you have a ready buyer, it may take several months to years before you can find the right buyer.

The advantage of hiring a business broker is that they have wide networks and established marketing methods. If you are working solo, you will need to compensate for these services. There are listing sites dedicated to businesses-on-sale. You only need to pay a one-time fee and your business becomes available to potential buyers.

You can also tap your networks. Perhaps, a friend or an acquaintance (or someone they know) is planning to buy a business. You can check your local business clubs or chambers. Visit online forums and social networks. Don’t limit your advertising methods.

Final Thoughts

As you can see, if you sell your small business without a broker is possible. It can even be advantageous if you play an active role in the sales and negotiation process. Quite obviously, business owners are more passionate to sell their business to the right buyers. Of course, you just have to remain rational and avoid getting your emotions to affect your decisions.

As a final caution, if you have no experience selling and buying a business, you should consider working with a business broker or someone who has experience in this field. Better yet, you can check with your local chamber of commerce for assistance and counseling.

Read Also:

Content Rally wrapped around an online publication where you can publish your own intellectuals. It is a publishing platform designed to make great stories by content creators. This is your era, your place to be online. So come forward share your views, thoughts and ideas via Content Rally.

View all posts

Leave a Reply

Your email address will not be published. Required fields are marked *

Related

business owner

Resolutions To Help The Small Business Owners To Avoid Being Bankrupt

Business is not something that can be started with a certain amount of cash. There are various factors how a developer starts creating a relationship between a borrower and a lender. This means that unless you are fully grown to start a business, you will have to undergo the requisite details of taking a loan from a formal financial institution. It is evident that the mode of this loan taking business is many but still it has a more or less similar process.  However, in this process, there may be some that may lead to a misleading way of this entire process. With quite an effect misleading of this particular aspect leads the business to grow his debt. Read also: How Industry-Specific Loans Can Support Your Business Reasons to fall into the ditch The lenders tightening their interest rates on the borrowers or with the increased rate of interest the borrowers tend to suffer the most. Many such small businesses lead to some misleading happenings fro not dealing the debt well. There are reports claim that ten present of the ratio gets bankrupt due to this debt issue. Thus, there need to cater to some ways in dealing with this massive issue to help the firm from getting some critical strategy in leading the business. The methods are necessary to save your business from being among one of those ten percentages. Avoiding extra charges There is an essential requirement to curtail and control the payment structure and the useless expenditures when you are in debt. It is very normal to be in debt but in the same way it is equally important to file some resolution in catering to the relevant fact and figure about meeting the debt. Track the details and ensure that your priority is to meet up with the demand of the debt interest. Once you finish repaying it, you can easily fulfill all your luxuries. Have a record on your budget This is one of the prime aspects that have to be considered when you are one of the borrowers. You need to increase your turnover to ensure that you can create a balance. Implement any proper accounts of people who will be tracking your budget in details. Following your budget will also help you to keep up with the amount that you need to repay. You can also move to the visit here option of different software that has been developed for tracking your business records. This keeps you in the upfront to deal with any issue faster. List your prioritization There is an important way how you can make yourself and your business stand in a better position. It is important to take a note of some important details about your lenders. Figure out the details initially and update the list whenever you finish paying one. Initially, it is claimed to repay the smaller amounts. List them according to the date of the lease. In fact, keep a calculative note on the interest rates and make sure to repay the high-priced loans as fast as possible. Designate your turnover into sections and maintain a separate account for clearing your debts every month. Read also: Six Pointers to Starting a Successful Business

READ MOREDetails
Why You Must Embrace Green Home Technologies?

Why You Must Embrace Green Home Technologies?

Did you know? Buildings in India account for… 33% greenhouse emissions 38% energy consumption 30% landfill waste 12% water consumption And, every year, built-up areas in the country grow by 10% with a whopping 700% increase in energy consumption! It’s time to re-evaluate our priorities, It’s time to give back to nature, And for our children, it’s time to ensure that our homes do not destroy the world. India has been a fascinating growth story. Our story of growth is also about stress on the environment and natural resources. Fragile ecosystems and endangered species are struggling amidst the fast-expanding concrete. However, there is a silver lining in every cloud. Staying true to the traditional ethos of living in harmony with nature, Indian real estate is welcoming new technologies and innovative architecture to ensure a sustainable future. New-age financial solutions and subsidies are likely to encourage the adoption of green technologies in the construction sector. Your contribution, however small, is significant in creating an eco-friendly living space. Going green is an important milestone for your family where you create a positive environment for growth. It saves you lots of money as you pass down the lessons of conservation to the next generation and add to their inheritance. Green constructions and architecture are the flavors of our times and builders are incorporating environment-friendly and energy-efficient features like LED lights, waste management plants, urban forestry, natural ventilation, thermos bricks and many other design elements for your conservation and well-being. Why do you need a green home? Money, money, money A green building creates many financial benefits for owners and tenants. Natural materials are compatible with the environment, while solar energy, proper ventilation, rainwater harvesting, water recycling, waste management, and foliage help to cut energy consumption and save large amounts of money for you. Tenants are clearly attracted to buildings which offer a reduction in everyday costs. Environmentally safe with GRIHA It feels great doing your bit to safeguard the environment. Buildings are responsible for one-third of greenhouse emissions and that portion can be reduced by 35%. Demand for high-quality, eco-friendly and energy-efficient real estate is growing across India. It applies to both, residential and commercial spaces. And with our urban air becoming a pollution hazard, it is imperative that as an Indian, you seek green alternatives to safeguard health, environment, and productivity. You can choose environment-friendly homes as per GRIHA (Green Rating for Integrated Habitat Assessment) rating. It evaluates how your home stands against accepted benchmarks of green buildings. Better innovation As an investor, you gain a higher yield from green buildings. The practice also spurs design and material innovation, which is important for our nation. The “green wave” has brought forth new technologies, understanding of ancient practices and ample research interest. Green buildings are using traditional material and recycling old materials to reduce our carbon footprint. Reduce, reuse and recycle: that’s the mantra sustaining your green home. A great start-up culture Grassroots awareness will drive greater adoption of green technologies. Rural artisans, cottage industries, and agriculture have felt a positive impact of the green drive. A new culture of entrepreneurs providing new solutions to builders is enriching the green economy. Green buildings in India are becoming a part of the culture. You should be thrilled to know our country was ranked #3 on a list of 10 countries by the US Green Building Council (USGBC) for LEED outside the US. India today boasts of 1 billion square feet of green building area. With over 200 million square feet of commercial space and 45 million square feet of construction coming up, you can say without a doubt: The sky is our limit! Apoorva Bharadwaj is a freelance blog writer. She has written blog posts largely catering to the real estate industry. Throughout these many years of her career as a blogger, she has kept up with changing trends in the real estate industry. She has written many blog posts on why the real estate prices are skyrocketing in major metros, how to choose the right real estate agents, about new apartments in metros, etc. At present, her latest blog work is on Jain Height’s new eco-friendly homes, luxury condominium projects for sale in Bangalore and about the right time to invest in an apartment.

READ MOREDetails
branding

Role of Promotional items in branding

Whether you have a small business or a multinational corporation, promotional giveaways can be the most suitable option. The benefits of promotional giveaways cannot be ignored not only because they are versatile, but also because they are quite profitable. Who wouldn’t want a quality giveaway, like a pen, t-shirt, water bottle, mug or other branded advertising products? When using promotional giveaways for your business, you will create a personal touch with customers, improve their awareness and knowledge, as well as make them loyal at the same time. With this personal touch : With this personal touch, your business will increase its brand recognition, market reputation as well as establish itself as a major player in the niche. In this way, you’ll always remain a step ahead of competitors and have a shiny position in the market. Customers also find it easier to recognize the name, objectives, and logo of your company. With this form of advertising, customers will not only know the name of your brand and memorize it for a long. In fact, this type of marketing technique is quite popular and can improve ROI. People often become : People often become disinterested when hearing a similar radio plug or seeing similar notices for organizations in their group. While these standard showcasing approaches do prove to be useful, special giveaways give an edge and an essence of something other than what's expected for customers. A rehashed introduction is additionally basic for advertising to be solid and valuable. In the event that a man is utilizing a written work utensil from your organization, this guarantees your organization is in the back of their brain. There are additionally numerous focal points to marked attire, notwithstanding like pens, tote sacks, or brandishing merchandise. Promotional items : Promotional items can make incredible presents for anybody! Regardless of whether your business isn't in the run of the mill "occasion blessing" class, an all-around coordinated blessing can influence a client to consider how your item or administrations could be valuable as a present for somebody they know. You can likewise make an environment of generosity with individual endowments that demonstrate that you think about your clients. A branded mug : A marked mug with the treat inside offers incredible a minute ago blessing alleviation to worried customers. Indeed, even easily overlooked details like a parcel of mints or a pressure alleviation ball can help shoppers to feel that you are contemplating them and their prosperity, along these lines expanding the merry sentiments of altruism amongst you and your clients. Also, special items are kept for about a large portion of a year, so that is a long time of promoting just from the nearness of a little, economical thing! You can contact It’s All Custom to get something extraordinary in order to do branding. For some independent : For some independent company simply beginning, the sticker price for limited time giveaways may seem, by all accounts, to be steep. Contingent upon the items that you put resources into, the cost can be altogether different. The influence of limited-time giveaways can to a great extent exceed any cash snag. The enduring effect of limited-time giveaways makes them an exceptionally profitable venture. The occasions are an incredible time to provide for other people who are in require. Amid the riotous season, it feels great to stop and help another person. Demonstrate to your clients that you give it a second thought and give them an approach to help other people by supporting philanthropy this season! You can give to any Foundation by offering a wide range of pink-marked things. Be considerably more honest by offering naturally amicable items and giving the returns to an untamed life reservation or an eco-accommodating non-benefit. This is an incredible method to connect giving and great deeds with your image, to get the message out about your business, and to help to merit philanthropy. Read Also : How Personal Branding Online Can Help Your Job Search Why Every Business Needs Digital Marketing Building A Brand For Your Small Business

READ MOREDetails