Are you ready to sell your business? Or Is your business ready to sell?
Here are a few industry inside secrets that may help you decide.
- Unrealistic Price
When a business goes to market, it should be listed at a price within a reasonable range to its FMV (affording some room for negotiation). Pricing a business outside of industry norms rarely results in success. - Creative Accounting
A business owner has run their entire personal life through the company requiring a significant number of P&L adjustments. The business will not qualify for transaction financing. - Sellers of businesses less than a year old
Businesses that have been existence for less than 12 months are essentially start-ups and very difficult to sell. - Sellers that won’t accept any seller financing
Some structures require seller financing such as goodwill in excess of $500,000. - Sellers that have partners they won’t disclose
- C-Corps and Stock Sales
A stock sale should only be considered if the business has non-transferable contracts - Pending litigation
- The Seller is the business.
Businesses that generate revenue largely due to the personal relationships of the owner create enormous challenges when a business sale is considered. In situations where the seller ‘is the business’, a comprehensive transition plan is required and likely, a structured payout. - Customer Concentration
High levels of customer concentration impact the salability of the business. - Commercial property issues
Landlords who are unwilling to provide either a new lease to the buyer or assign the current lease waste lots of time and could jeopardize the business sale.
If you have any questions, feel free to contact us.
