Sell Your Business By Eliminating Fear And Uncertainty Article

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Sell Your Business by Eliminating Fear and Uncertainty

Selling a business is all about confidence. If you can improve a buyers confidence in your business you increase the chances of selling it for a premium.

Author: Amara Ukaigwe

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Selling a business is a complex and time consuming task. Owners can often spend up to two years planning and preparing their exit, with it eventually taking precedence over everything, including running the business. With the worsening economy and dearth of commercial credit, vendors face an even tougher task when selling their business. It’s now a buyers’ market and for a business to be sold it needs to be priced appropriately, possess solid financials and good growth prospects. If your business fits this criteria then it can be sold, as long as you are able to overcome the largest obstacle of all, fear and uncertainty in a prospective buyers.

Buying a business is a life changing event which can bring great rewards or years of frustration. Buyers, especially those purchasing a business for the first time are very cautious and apprehensive about a deal of this magnitude. If you are unable to remove a buyers’ natural apprehension, selling your business, especially in these economic times, will be an uphill struggle. The most effective method of removing fear among prospective buyers is to demonstrate that your business is a solid investment.

Many prospective buyers believe that small businesses are over dependent on the original owners and fear that once a business changes hands, it will lose much of its original value and end up underperforming. The fear of the business underperforming is the greatest hurdle a
vendor can face when selling their business.

How can you overcome fear in the mind of a buyer?

The key to overcoming this fear is to demonstrate that your business is healthy and will continue to perform once the new owner takes charge. Vendors should understand that buyers are risking a large percentage of their net worth when acquiring a business, which is why they don’t dive in head first. Prospective buyers need to be absolutely sure that the business they are purchasing will continue to perform and will meet and possibly exceed their expectations.

A business that does not rely on the owner for its day to day tasks, is equipped with a capable management team that will continue to work with the new owner and a regularly full order book, is a great investment prospect. Buyers are confident about purchasing a business with these characteristics, if you can build this into your company, you stand a good chance of selling it for a premium.

Your company’s financial statements should be up to date and professionally audited with limited adjustments for non-business expenditure. Financial statements with several adjustments for non-discretionary expenses are taken with a pinch of salt by buyers, to instil maximum confidence it is important that the audited accounts are a true reflection of the business’ performance. Buyers rely heavily on a company’s financial accounts when determining whether the business is a good investment, therefore up to date and well prepared accounts are vital for reassuring prospective buyers.

Demonstrating that your business is capable of generating revenue without you will also remove uncertainty in the mind of a prospective buyer. Buyers are willing to purchase businesses that are not reliant on the outgoing owner for sales or generating new business. If possible build in marketing and sales teams before offering your business for sale as this will attract a higher calibre of buyer.

The key to selling your business is to reduce the fear and increase the confidence in prospective buyers. Through planning and good preparation, you can convert a buyer’s natural apprehension into confidence and this can lead to you selling your business for a premium.

About Author

http://www.sellandexit.co.uk Helping small business owners sell their businesses and helping business buyers purchase their perfect business.

Selling or buying a business is a complex task and you only get one shot at getting it right. Sell and Exit is the best place to start if you want to sell or buy a business today www.sellandexit.co.uk

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Sell Your Business by Eliminating Fear and Uncertainty