Selling a business is not an easy task. Business owners wonder if they can do it themselves without having to pay business brokers’ fees. In some special circumstance it can make more sens the do it without professional help but in most case, the help of business brokers in invaluable. So many mistakes can be avoided, the sale time could be shorter and the price could be higher.
Business evaluators use a variety of financial models as guidance in their valuations but their personal judgment is the principal element in their decision to put a value on a business. Large corporations use their assessment of the potential future of the business and the potential synergies they might get from acquiring it in in order to make an offer for an acquisition. Small business buyers however, base their offering prices mostly on the past history of profits.
Toronto is a great place to sell a business. Generally, business prices are higher and businesses sell in shorter periods in Toronto. Unfortunately Toronto business owners who lack experience in selling businesses and who insist on going through it without professional help end-up leaving a lot of value on the table.
Timing the sale of a small business should not be driven only by the economic cycle. A good exit strategy has to take the whole picture into account. The decision to sell a business is a life decision. Basing the decision only on speculations about the economy could be a big mistake. As business brokers in Toronto and surrounding areas in Ontario, we constantly meet potential buyers who are paralyzed by fear about recession. They end-up wasting years with no income and never make a decision about buying a business even when the economy improves.
Selling a small or medium sized business is not an easy matter. Most business owners contemplating selling their businesses as an exit strategy don’t have any experience doing so. As a result, when trying to sell their companies, they will probably make numerous mistakes that will not only cost them a lot of money but [...]
This is the dilemma facing small and medium size business owners thinking about an exit strategy. As a business broker, I am constantly interviewing business owners inquiring about the business sale process. It is clear that the decision to sell a business is not an easy decision. Potential business sellers face a numerous uncertainties: Uncertainty [...]
Most business sale advisers stress the importance of timing when selling a business. They reasonably argue that business buyers are much more enthusiastic about purchasing a business in good economic times than in bad times. It is reasonable to believe that multiples applied to value businesses vary during the economic cycle and are normally higher [...]
In my career as a business broker I noticed that if there is only one virtue that would dramatically increase the chances of selling a business at the highest possible price and within the shortest period of time, it would be honesty.
Honesty with business brokers: serious business sellers use the services of competent business brokers to sell their companies. Business brokers will use the information provided by the seller to present the business at its best lights to the right buyers who are most likely to present serious offers. What happens when sellers misrepresent or exaggerate their companies advantages to
In our business brokerage practice we frequently receive calls from business owners almost desperate to sell their businesses. Owners start by explaining their business and the huge potential it has for the near future. Then, when I ask about their bottom line, their become very uncomfortable talking about it. These are generally businesses started in the two previous years with unproven business models. The owners made important investments in equipment, leasehold improvements and employee salaries but could not recover their investments for multiples reasons. Naturally the option to sell the business appears very attractive since it
Most business sellers don’t know where to start when they want to explore the idea of selling their business. In most cases this is a one time event that business owners are not prepared for. A variety of books have been written about the subject and can provide valuable information about the business sale process. Business owners are however very busy running their businesses. Purchasing and reading a specialized book is rarely the natural option.
As a first approach, we suggest that a business owner contemplates these questions: