Common Hazards To Avoid With a Small Business For Sale

If you are planning to sell your business on your own, there are numerous pitfalls along the way that you need to avoid. The problem is when you don’t even know how to spot these dangers even if they are staring you in the face. There are two ways to go about the sale of your business: either you market your business for sale online on your own or hire a credible and experienced business broker to assume that responsibility. The first route is more stressful and labour intensive, particularly when you have no prior expertise in the field. The second way is obviously more ideal if you want to sell your business at the highest price in a shorter time frame at little extra effort on your part whilst you continue to concentrate on running your business.

Mistake 1: Lack of planning

Whether you are looking to sell or buy a business in Australia, it’s all about the timing. You will miss an opportunity to obtain the best price if you wait too long or act too soon. Perfect timing takes careful planning. The important thing is to never be impatient. On average in the current market it takes 6 months to a year to sell a small business. Even putting your business in the hands of a really good broker doesn’t guarantee a quick sales because there are too many external factors to consider.

For example, you should have a good record-keeping system so when it’s actually the time to sell, you won’t have to go back through a mountain of paperwork or incomplete data just to show the status of your business at the time of the sale.

Mistake 2: Trying to take on too much

Just consider the task involved. You will have to carefully prepare the listing of your business, design an advert or some brochures, come up with proactive measures to aggressively market your business, available be always when the prospective buyer comes to call, contact a tax professional or legal counsel to handle the paperwork, and spruce up the place to add value to the property. Even then, there’s no guarantee you are going to get the maximum possible price for your business. These days most marketing takes place through sophisticated and professional websites most of which are not available to the general public, which means you will often miss the opportunity to reach the target market.

If you can’t make heads and tails about the business for sale market, taking on too much can be very dangerous indeed. Do notget too caught up about the broker’s fees because a professional broker can often obtain a higher price in the market which will more than pay for these costs when you put up your small business for sale. It’s the classic case of failing to see the forest for the trees.

Mistake 3: Jumping the gun

Jumping the gun is an idiomatic expression to denote over-eagerness. Just because somebody makes an offer does not mean you should immediately accept it. This is the most common mistakes by first-time sellers who did not hire the services of professionals.Knowing how to negotiate to obtain the best deal is very important when you sell one of the largest assets that you own, your small business for sale.

5 mistakes to avoid while buying a business

Here are five most common slip ups while a buying business.
1. Growing fond of a business, excessively – This is perhaps the most common of all mistakes in buying a business. Say, your targeted business is in a good location, makes good money, has experienced staff and has a decent reputation in the market. You think you finally found the business you were looking for. Well, you might just be a victim of love at first sight. Buying a business needs crunching a lot of numbers such as payables, loans, competitive analysis, business reputation, and so on. It’s wise to keep emotions aside and be financially astute while evaluating business alternatives.
2. Fail to assess correct synergies – Often it is a better choice to buy a business rather than starting from ground up. Assessing synergies is at the crux if you plan to buy a new business to make your existing business more competitive and profitable. For those who need the biz word translation, synergy means two or more things working together can produce more results than working individually. You will need deep analysis of venders, supply chain, business operations and so on. Seeking professional’s advice will go a long way.
3. Not doing enough homework –Often entrepreneurs fail to understand why the business is on sale. You need to dig in deep to see through the real picture. Compare the target business with others in its industry and try to ascertain its competitive positioning, check out what customers and venders say about the business. Get a 360 degree assessment of every potential business on your buying radar.
4. Relying too much on financial documentation – Watch out window dressing of the balance sheet. Engage a business valuation expert if needed or else you risk making such a vital decision on marshy grounds. It is strongly suggested that you get the contract terms in writing. Should there be a dispute in the future, you have the solid documentations to fall back on.
5. Not using an intermediary for negotiation – Negotiating the deal can be extremely stressful. Every nuance needs to be worked to the hilt. The legal jargons, terms of purchase, modus operandi of management processes and so on involves lot of time and can be overwhelming. This is where expert business brokers come to your rescue. Choose your business broker wisely and get maximum value of you money.
Business brokers will show you options that closely match your requirements so you are less likely to be compromise by limited choices. They have experience and are business astute to get you the best synergy with the targeted business. With their business valuators, you pay a fair price for the business acquisition. They have the expertise in documentation and so not even the minutest detail is evaded from the contract.
The property business is on the rise and so are property scams. You need right people by your side to keep from fake sellers and loosing out your money on illegitimate deals. It is suggested to hire a third party to represent you in the deal. You will be surprised at the benefits of engaging professionally trained business brokers.