It’s Business, And It’s Personal

Things to do before selling a business

On Behalf of | Oct 31, 2016 | Buying & Selling Businesses |

Even the most successful entrepreneurs in North Carolina and around the country sometimes choose to sell their businesses. Some commercial ventures are sold because they have failed to live up to expectations, and some companies are disposed of because their owners have decided to pursue other opportunities or retire. Selling a business can be a complex and protracted process, but there are some steps that entrepreneurs can take to avoid many of the most common pitfalls.

Setting an unrealistic price is one of the biggest mistakes that entrepreneurs make when putting their businesses up for sale. While the value of assets like machinery and vehicles can be checked fairly easily, business valuations are made after factors like goodwill and the amount owed to creditors have been taken into consideration. Businesses that are not performing well are unlikely to draw many potential buyers unless the price is set low, but even companies that have failed could be attractive if they are located in high-traffic areas or have sizeable inventories.

Business buyers generally make their decisions based upon what kind of returns a company is providing today rather than its long-term potential, and savvy entrepreneurs may seek to boost their bottom lines by cutting costs or adding income streams before listing their companies for sale. However, entrepreneurs should focus on increasing profits rather than boosting revenue or turnover. Another way that entrepreneurs can quickly improve the profile of their businesses is to encourage happy customers to place glowing reviews on popular online portals like Google and Yelp.

Once a price has been agreed, negotiations generally revolve around contracts, permits, licenses and other important documents. Attorneys with experience in these types of business transactions may perform due diligence checks on potential buyers to ensure that they have financial means necessary to complete the purchase.