Misconceptions About Selling a Business | VR Business Brokers of Charlotte

There’s so many myths about selling a
business. I wanted to spell some of those common misconceptions. [Intro Music] Most business owners will only sell a
business once, so it’s important to understand the complex process and not
to fall prey to the myths that can derail or seriously affect the sale. Myth #1. “I can sell it myself.” Here are the outcomes that I see when owners try to sell on their own. They underestimate the time it takes to sell. They overpriced their business and most importantly, they lose focus when it comes to running their business day to day. Most business owners think they can sell
their company quickly. In truth, the average transaction takes nine to ten
months, sometimes longer. It takes time to get all the documentation together, get
the business on the market, vet potential buyers, put financing in place and then
work through all the challenges and legal issues. Valuing a business is not a
one-size-fits-all. Many business owners don’t have access
to valuation tools and listings on a national scale. You don’t want to set
yourself up to fail because your business is not priced appropriately.
When you decide to put your company up for sale, you still need to focus on
running the day-to-day business. But, selling takes a lot of time and energy
and owners often take their foot off the pedal, resulting in decreased
profitability. Sellers need to keep their eye on the prize and continue to focus
on running a successful operation. Whatever your goal, you want a great
advisor to help you assess the value your company, question your advisor on
the effects of deal structure, and how multiples are used. A business owner
should never accept a computer-generated valuation, where one size fits all
approach when selling your business. Don’t be impressed by the person who
presents the highest value. You may only have be setting yourself up for failure
during the process. Myth #2. “I’ll sell when I’m ready.” Certainly, an owner wants to be sure he or she is mentally and emotionally prepared to sell, but personal readiness is just one factor. Economic factors can have a significant impact on the sale of business. Sale prices can be affected by
industry consolidation, interest rates, unemployment, and many other economic measures. Talk with a professional and aim to sell when your personal goals align with the market conditions. Myth #3. “I know what it’s worth.” Some owners will base the company value on what they need or want for their
retirement, not the true value of the business. Others have a mental accounting of what they’ve invested over the years and add that up and that is their value.
A third-party opinion is a good idea for anyone seriously considering the sale of
their business. Any outside opinion will include a thorough analysis of the
business and the market it operates in. This will provide a solid understanding
of the company’s growth potential, not some vague industry average. Myth #4. “It’s like selling a house.” Selling a company is much more complex than selling a house. A successful business sale usually requires a great
deal of pre-planning- at least a year, maybe longer- to help drive sales, develop
key staff, document the operations, and control expenses. The average house will sell usually in less than six months, while the average business may take nine
to ten months- maybe longer. A house has no employees, customers, or vendors and
has openly advertised, all of which is not the case in a business sale. Even after the business is sold the seller may be required to work in a
transitional time with the new owner, something that doesn’t exist when you
sell your home. A business sale is very complicated, much more so than a home
sale process. If you don’t believe me, ask somebody who has sold their business. Are you thinking of selling your business? Please feel free to contact us at VR
Business Brokers, to see how we can help you. Feel free to connect online at vrbbcharlotte.com or call us at 704-360-8898. We want you to get the best results when you are ready to sell your business and we look forward to working with you.

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