How to Find Buyers for Your Small Business

Selling a business takes longer and more patience than selling any other investment or property. However, you can make that sale more likely to happen if you just find potential buyers on your own.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• Computer
• a computer with internet connection.
• yellow pages
• your profit/loss prepared by a C.P.A.

1. Put together all paperwork for selling your business first. This involves having your C.P.A. verify your profit/loss statement. If you own the property, be sure the title is clear. Put together a selling price based upon the price of equipment, land (if applicable), and the net profit plus blue sky. Make an easy to read list showing how you arrived at the price you asking. If you have been "skimming," you need to stop that for two to three years to show a profitable business. Don't count on telling the potential buyer that "the business is lucrative" and expect them to believe it. They are looking at the bottom line.

2. Make a list of reasons why someone should buy your business. Lay it out on paper and be able to give it to someone that meets with you. Include special equipment, unique referral sources, client list, special software, whatever it is that makes your business have an edge over the competition.

3. Analyze your competition. Are there any that might benefit from buying you out? Does a competitor need a good location on the north side of town where you are located? Do you have a special customer base that they would want? Is the owner of the age that expansion would give him/her a special edge? Write down every reason that competitor should buy you out.

4. Contact the owner of the business that would most likely benefit from owning your location or customer base. Meet in person and ask them for confidentiality. Explain why you wish to sell. This is not the time to tell your competitor that you want to sell because you want to make a ton of money. Instead, cite health or family concerns, or any other non-business related issues. This is not the time to cite declining sales, poor employees, or bad location. Explain the advantage another competitor would have if you had sold to them instead.

5. Show them your books only if they express an interest in buying, but only with serious earnest money down. Then if they agree to buy, you will need a letter of intent from them.

6. If you can not find anyone in town who is interested in purchasing your business, consider looking around the local county or state for buyers. There might be someone else who is interested in buying. Often companies want to expand into another town.

7. Finally, list on e-bay, Craiglist, or with a business Realtor. Ask that Realtor to give you an honest opinion about the asking price. Ask for comparables with other businesses. They will do this if you are going to list with them. You may need to bring the sale of this business to a wider audience if your competitor won't buy.

Tips & Warnings

• Make your bottom line look as good as possible by not "skimming" off of the books.
• Don't expect your business to sell immediately. Selling businesses take time.
• Expect your competitor or all buyers to do due diligence.
• If property is involved, spruce it up a little. it will fetch a better price.
• Never tell your staff that you are selling. Employees may begin to find work elsewhere and the staff drain could become liability.
• Expect to attract people who will act as though they are going to buy your business. Although you should be kind to them, because you never know if someone truly does have the money, don't get your hopes up too high.
• Don't skip over the earnest money before turning over your books. The last thing you need to do is to have competitors read your books, find out all kinds of information and then walk away.
• Never allow people to use your equipment or work on site until after the closing of the property agreement.
• Don't overprice the business or you will end up disclosing much information for no reason.