How to Sell a Business

Selling a business requires walking a fine line between maintaining customer confidence and marketing the sale.

Instructions

Difficulty: Moderately challenging

Things You’ll Need:

• Business Loans
• Wall Street Journal
• Business Magazines
• Accountants
• Business Licenses
• Business Plan
• Business Opportunity Appraisal
• Financial Statements
• Commercial Real Estate Broker

1. Call a commercial real estate broker who specializes in business opportunities. Look in the yellow pages under "Real Estate - Commercial." The broker can give you an estimate of what the business is worth, evaluate the equipment and give you a list of similar businesses that have sold and their sales figures.
2. Read business newsletters and magazines to see what similar businesses are for sale.
3. Determine how your clientele will be affected by the sale. Will you lose a portion of your customer base if customers know you are selling? If so, you may not want the sale to be public knowledge.
4. Hire an appraiser to conduct a business opportunity appraisal (if you plan to sell the property without a real estate broker). Appraisals can be very expensive, so compare costs. You can find appraisers in the yellow pages.
5. Plan a marketing strategy, whether you are selling the business by yourself or with the help of a broker. Determine which marketing tools will get your business the most exposure.
6. Find a local business organization or networking referral service that can help promote the sale.
7. Advertise in local newspapers and regional and national business magazines and newspapers.
8. Join business trade organizations. Members often receive free advertising services, and the organizations offer a built-in network of potential buyers.

Tips & Warnings

• Contact a local chapter of the Small Business Administration to get information about selling a business.
• Businesses are governed by several agencies; make sure you adhere to all laws and regulations. Check with local government agencies to verify your responsibilities as a seller.
• Be prepared to show interested parties financial statements, including profit and loss statements, dating back at least two years.
• Make any offer contingent on the prospective purchaser reviewing financial documents.
• Do not show your financial statements to everyone who inquires. Require a written offer with a contingency to review financial documents.
• If you plan on handling the sale yourself, do not accept an offer without first having it reviewed by an attorney who specializes in business.
• Businesses are typically more difficult to sell than residential properties, and it may take longer to find a qualified buyer.
• Many people want to purchase a business but have no experience running one. Consider staying on in a management position (for a fee) to help the new owners get things going. If you have carried back a note on the business or property, you'll have a vested interest in making sure the new owners succeed.