A new year is furnished with goals and plans in the same way that a new home is decked out with fixtures and furniture. Planning to sell your small or online business is just as huge a financial and emotional decision as home buying or relocating. To fare well in such a life-changing and potentially lucrative move, keep these tips in mind to avoid wasted time and crushed dreams.
Pitching an Unproven Concept: While shopping your business around keep in mind that your perception of your entrepreneurial spoils may not be the same as potential buyers. Have you proven your concept with a revenue stream or are you pitching the potential of your business? A buyer’s goal is to purchase a successfully proven concept without the requirement of developing it.
Be Transparent and Honest: A buyer worth his or her weight is going to exercise due diligence throughout the course of the transaction. It will not benefit any of the players if there are any hidden agendas or motives. Seasoned investors are not expecting a perfect business and can expect that there are some negatives to consider. Attempting to hide negative aspects while zealously promoting positives aspects of your business to a potential investor will be an indicator that perhaps there may be way more than what’s being bargained for.
Judging the Buyer: This is especially true in cases where an online business is on the market. Don’t underestimate the potential buyers based on their novice understanding of an industry, because they may have the cash and assets to make your selling dreams come true.
Boasting Revenue Over Profits: Though both of these financial terms are positives for any business, one of them is not like the other. If you’re thinking that profits are the superior of the two you’re right. Admonishing the revenue of your small business when your monthly or annual profits don’t meet or exceed that number, your investors are going to press the pause button on negotiations. Profits are king.
If you are serious about having a business owner's succession plan that will be favorable of your future, it’s important to avoid any of the many pitfalls that can be avoided. Avoiding these mistakes in selling your business can push you closer to retirement or the next big thing.