FSBO (For Sale By Owner) has become popular in the residential real estate market over the last few years, primarily because of the internet. However, for many reasons, selling a business isn’t like selling a house. That’s why FSBO is a dead end for most business owners. Here are five reasons why (and there are many others) you shouldn’t go it alone.

1. Time – Most business owners have more than a full-time job just managing their businesses. Selling a business requires hours of preparation, marketing, screening, meeting, negotiating, document preparation, and hundreds of other details. It generally takes 6 to 18 months to sell a business and that’s with someone devoting full time to the effort.
2. Objectivity – Can you objectively value your business? Can you determine the amount of good-will versus the buyer’s estimate of blue sky? Can you separate your ego from the market value of your lifetime work? 
3. Confidentiality– Keeping quiet and having trusted partners is crucial. Simply put, confidentiality reduces risk and keeps your business momentum from stalling with employees, customers or suppliers.
4. Screening prospective buyers to determine who is a real buyer versus a tire kicker or, worse, a competitor, who wants to steal your customers and employees. How do you protect your business from folks like that? How do you know who has the money and experience and resources to buy your business?
5. Negotiations – This is oftentimes where feelings get hurt and money is left on the table. Buyers are increasingly savvy and know how to get sellers to give up terms and money. Buyers have a team of accountants, attorneys and advisors who are experienced in negotiations. Who will represent the seller? How do you negotiate the allocation of assets, an exercise that can cost an unwise, inexperienced business owner thousands of dollars in taxes.

These are just a few of many reasons why smart business owners choose a trained, professional, experienced, full-time business broker/intermediary to represent them in the once-in-a-lifetime experience of selling a business. Reach out to your local CBI team or call or email today for a no-obligation consultation at 877-582-5200 or confidential@cbiteam.com.

By: Aspen Grams, Marketing Strategist

The baby boomer generation continues to age. As a result, we’re seeing a steady increase in the number of business owners choosing to exit their business and enter retirement. If you’re planning to sell your business, knowing the value of your business is key. It ensures you receive top dollar for the company you’ve put your heart and soul into over the years. If you aren’t sure where you stand, keep reading to learn how to add value to your business!

Over-valuing the business results in a stagnant listing. Buyers pass by your listing in favor of an option with higher-perceived ROI. Under-valuing results in a sale that leaves you with less money than you deserve. Therefore, it’s important to have a valuation completed by a professional. Working with a business intermediary, such as the ones at CBI TEAM, ensures the valuation is accurate and timely. In addition to valuations, these intermediaries work on your behalf to secure qualified buyers.

If the valuation presented is less than desirable, you can enhance your growth track and reduce risks to your business before you list it. In this article, we identify three key value drivers for both growth and risk reduction. These will position your business as a sound investment to a qualified buyer.

Risk Reduction

1. Stable, reliable financial information

Buyers look for cash flow that’s predictable and on a growth track; therefore, keeping comprehensive books is crucial. Buyers look at your financial statements to decide if their investment is solid. If you have recurring contracts and solid sales reports, it reassures buyers that they will receive stable return.

2. Diversity

Buyers want to know their investment is safe, so diversity among products, customers and suppliers is a great way to deliver assurance. Firstly, diversified products reduce competition within the market and provide barriers to entry. Secondly, a diversified customer base provides proof of company satisfaction as well as a cushion for any surprise account losses. Lastly, a diverse range of suppliers provides more stability in the face of potential market disruption, changes in quality or availability, and supply catastrophes.

3. Reliable operations

Buyers want to know the business can succeed without you. Having well-documented and functioning operating systems ensures the ship won’t capsize once you leave. Similarly, a company dependent on you will not succeed under new ownership. A quality workforce and a loyal management team are vital to a smooth transition and continued operation.

Growth

1. Documented growth strategy

A solid strategy shows buyers that the seller has a vision for the company and has implemented efforts throughout the years. In addition, it shows the buyer the value of future opportunities within the market.

2. Scalable business model

Buyers look for companies with strong growth potential. They want to see a sustainable product that can increase profits over time. In other words, a model that can multiply revenue with minimal incremental costs.

3. Unique fulfillment

If the way your company meets customers’ needs differentiates you from the competition, buyers will recognize the potential for higher profit margins and market domination. As a result, they’ll be more likely to invest.

In conclusion, your business is an investment. A buyer’s willingness to pay top dollar is dependent on their view of its potential. You can shape that view by presenting values that drive growth and reduce risk. If you want to transition into a new life phase in the near future, a valuation is the first step in the selling process. Contact CBI TEAM to connect with a confidential business intermediary and start securing your financial future today.