Sacramento Business Brokers
Are you a business owner in Sacramento thinking of selling your business? The selling process is a complex process requiring a professional approach to be successful. A professional approach includes a team which includes your attorney, accountant, and one of the top Sacramento business brokers. Today, selling a business is so specialized that even the best attorney, accountant or real estate broker is no substitute for the savvy locally based Sacramento business broker who knows where the right buyers are.
The first task will be to price your business right. Don’t choose your broker on the basis of which one quotes you the highest listing price. You need to price your business realistically, with proven pricing methodology that is defensible to a potential buyer. Failing to do this, the time it takes to sell just stretches out until it finally sells . . . if it sells. Nothing raises the doubts of a prospective buyer more than to find out you’ve been trying to sell for a long time.
Some Sacramento business brokers offer an inexpensive (or include a free) valuation. The International Business Broker Association (IBBA) has a market-value based process known as Most Probable Sales Price which is offered by some business brokers. Finally, there are certified business appraisers, but, a full-fledged business appraisal costs upward of $5,000, so don’t expect a good written appraisal for less. Which method to select depends on many factors and the complexity of the business, so discuss this with your professional team and decide which approach to use.
Once you’ve selected a broker and signed a listing agreement, it is time to begin documenting your business and creating a marketing package. Comprehensive documentation from a buyer’s perspective is essential today. That means you have to develop a convincing package to present your business.
Buyer prospects expect that you will have accurate and current financial reports and that you will provide a detailed analysis of your business and the markets it serves. Today’s buyers also expect you to be able to justify your price and terms of sale based upon their understanding of normal investment returns.
After your marketing package is complete, you should have identified what kind of buyers to target. You’ll know how much cash they must have to make it work. You should develop a profile of “strategic buyers” and build a list of these people or companies. Have your business broker call them.
If you decide to advertise your business for sale, use common sense. Fewer than 5% of the general population are prospective business buyers, so focus only on the established ‘business for sale’ advertising websites. In California, BizBen is the most commonly used website for business buyers. There are a number of national websites, like BizBuySell, Business Broker.net, and others. They should be ‘blind ads’ where the identity of the company is protected, while providing enough information to generate interest. It is best to keep your marketing effort confidential except to strictly qualified prospects. A business broker will utilize Non-Disclosure and Confidentiality Agreements to assure this is done.
When you get a qualified prospect, remember that your goal is to sell, and not to win the negotiation. Allow your business broker to stay in the middle to serve as the glue that will hold the deal together. Focus on interests, not on positions. Generate solutions to problems. Work for a win/win!
Strike while the iron is hot! Don’t delay the negotiation un-necessarily. Prospects can change their minds quickly so be responsive. After the prospect makes a commitment to buy, get it a written offer and get a non-refundable earnest money deposit. After the initial agreement is signed, power through the due diligence process and close escrow as soon as possible.
If you wish to speak with one of the top Sacramento Business Brokers, please contact Ron Schwab at 530.269.1143