How long is the legal process?
The time frame of the legal process can vary depending on the nature of the business and whether there are any legal complications. However, from the signing of the heads of agreement until completion you should usually leave at least six weeks.
Can you sell a business that is losing money/how to sell a failing business?
Even if you have seen a downturn in your business, you can find an interested buyer. There are plenty of people that are looking for a lower valued business that they can inject capital and energy into.
Before the sale, though, tie up any loose ends you may have, such as legal issues or outstanding debts. You can then focus on the assets your business has and market these to potential buyers.
Don't shy away from being honest about the weaknesses of your business. Anyone interested in purchasing your business will conduct due diligence and so it’s better that you are honest and upfront.
Do I need a lawyer to sell my business?
During the sales process you will be required to deal with a lot of paperwork and contracts. It is advisable that you get advice from a lawyer when drawing up any of these contracts or to have them to look over the paperwork before signing.
A lawyer will also be able to assist with the Non-Disclosure Agreement that the buyer will sign before the due diligence process.
Do I pay tax if I sell my business?
If you sell your business, you might have to pay Capital Gains tax. This is true for any business asset that you sell. You will pay capital gains tax if you are a sole trader or in a business partnership.
Do you need a broker to sell a business?
The decision of whether or not to use a business broker can be a confusing one for those that are setting out to sell their business. The short answer is that you don’t have to have a broker to sell your business. The long answer is more complicated than that.
The sales process can require a lot of your time. If you are very involved with the day to day running of your business, getting a broker to assist with the sale can allow you to keep your focus on your business.
You will need to give the broker a commission of the sale. Most importantly, however, the exact broker you use can make a huge difference to the success of the relationship.
Read more in depth on the question here.
How can I sell my small business fast?
There are a few considerations that you can make if you want to sell your business as speedily as possible.
Make sure that you have priced your business correctly. If your business is overpriced, you will struggle to find a buyer. Make sure that you are prepared for the due diligence process. Have all your documents and financials in order and ready when requested.
Make your business listing as attractive as possible. Get some really good, high quality images of your business to go with the listing and give as much information as possible to any potential buyer.
You could also find a similar business to yours that might want to expand their customer base or offerings through purchasing your business. Usually, they will not want to buy the premises or the fittings or the equipment. They will, however, be looking for your contracts with suppliers and your intellectual property.
How do I market my business for sale?
In order to market your business, you should take advantage of the reach that putting online will have. You can also use a broker to help with this process and they should be able to take this action for you or assist you. They will also be able to advertise your business through their established networks.
No matter whether you advertise online or offline, you will need to get high resolution images that give a clear idea to the buyer of what your business looks like. You will also need to include as much information as possible in the advert. The more information you can include without giving away sensitive information, the better.
Luckily, BusinessesForSale.com can help you with this! Get hold of us if you want us to write your listing for you to make sure that it is written for SEO and to ensure you get noticed by buyers.
How do I sell my business privately?
If you want to sell your business privately, you can reach out to customers and people in your network to see if there is anyone that is interested. You can also find out if there is a competitor that could benefit from buying your business.
Be careful, however, not to share sensitive information without having an NDA in place!
Alternatively, you can list your business on an online marketplace. This will give thousands of potential buyers’ access to it and anyone searching for a business for sale online will, hopefully, come across your listing.
How do you value goodwill for a small business?
Goodwill makes up a significant portion of the value of a business but, due to its intangible nature, it can be difficult to assess its value.
The value of your goodwill be higher if you have a good standing in the community, you have solid relationships with your customers and suppliers, or you have protected intellectual property that gives you an advantage in the market.
There are several methods used to calculate goodwill, however, most importantly, the value will be what someone is willing to pay for your business. Find a professional to help with the valuation if you are unsure.
How long does a business take to sell?
This answer will obviously vary depending on the business and the sector that it is in. In general, however, it takes 6 to 9 months to sell a business. Some business owners find that it can take a lot longer if there is a downturn in the market. If it is priced correctly, it will sell quicker.
How to know when to sell your business
We have created a guide to help you through the process of selling a business. If you are struggling with the decision of when to sell, read the section on timing the sale of your business.
How to sell an existing business
Our guide to selling a business will take you through this process step by step. If you still have questions, you can employ the services of a broker to help you.
This guide will give you a good idea of what it is that you need to consider when it comes to selling your business. Go through it carefully to make sure you have not forgotten any of the important steps.
Alternatively, why not contact our customer services team to get some advice!
Should my accountant sell the business for me?
Going into the sale of a business, you may want to employ the services of an accountant. They will be able to assist you with the due diligence preparation, the valuation, and get your financials in order. This will make your business more attractive to buyers.
An accountant can also work out the deal structure for you. The sales process is something that they will only be able to help you with if they already have experience in this area. If not, you may need to consider enlisting a broker to help you find a buyer.
What happens to cash when selling a business?
The seller of the business will keep the cash on hand as well as the accounts receivable. The buyer takes control of other assets such as merchandise, equipment and the brand itself.
This is not, however, true for all businesses and can vary from one instance to another. Some buyers will take over the accounts receivable in a business so that they can immediately start dealing with customers and get cash flowing into the business.
What is a disclosure letter?
A disclosure letter is an important part of the sale of any business. It is a document where the seller will make any disclosures against any warranties that the buyer will need the seller to give.
This document will usually be prepared by the seller’s legal team for the buyer. Usually, the seller will need to put as much detail and information into the letter as possible. The seller must make sure that the buyer is able to gain a full understanding of each of the matters disclosed.
If, as a seller, you are unsure as to whether something should be included or not, err on the side of caution and put it in.
What is an NDA?
A Non-Disclosure Agreement (NDA) is a document that will protect the seller during the due-diligence process. Any potential buyer will be accessing information about your business, its finances and other sensitive information. It is vital that you have an NDA in place in order to protect your business.
Ask for professional advice when drafting an NDA to make sure that you have included everything in it. This can include employee information, details of your products, your technology or innovation, financial information and databases.
How to sell your small business without a broker
If you are hoping to sell a business without a broker, you should consider listing your business online so that you can reach as many potential buyers as possible. You will then be playing a more active role in the sale.
Selling the business yourself will mean avoiding paying a commission to a broker. You may still need to consult a lawyer or an accountant so that you can get your finances in order and have some look over the documents involved in the selling process.
How to sell your small business with a broker
When you are looking to sell your business, you will need to keep your foot on the pedal right up until you hand over the keys. This may mean that you don’t have the time to sell your business yourself. You might also be unfamiliar with the process and so need the help of a professional.
A broker will be able to handle much of the sale for you including drafting the terms of service and the negotiations. Make sure that you find the right broker for you and one that you can trust with a good track record.
How do I choose a business broker to sell my business?
When choosing the right broker, you need to carefully consider your needs. Find a broker that has experience with businesses in your sector and of a similar size. If you can, speak to previous clients and find out about their experience with that broker.
Most importantly, you need to get on with the broker. You will need to be able to trust that the broker has your best interests at heart.