Why isn't my business selling?

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October 21, 2011 by Kendric Foultz

Almost nothing is as upsetting to a business owner than listing their business for sale and then having it sit on the market for months with no activity on it!  “What is wrong, why haven’t you sold my business” you ask the business broker.  The answer might be complex or very simple.  The best thing to do as a business seller is to ask yourself a basic question.  “Does this offering make sense?  Would I buy my own business as presented?”

Put yourself in the Buyer’s shoes and price your business accordingly.  First of all the asking price and terms have to make financial sense relative to the historical earnings of the business along with future positive outlook for the business and  its industry.  In a great many cases, it’s the asking price that is preventing the sale.  Next take a look at the terms.  If the business has been approved for SBA financing then terms shouldn’t be a problem.  If the sale doesn’t qualify for outside financing and the seller wants more than 50% down payment then you are likely to have a problem.  Ask the business broker to show how the business would cash flow for a new owner.

Goodwill will likely be the most valuable element of your business.  A credible Confidential Business Review will substantiate the value to a Buyer and increase the likelihood of getting a reasonable offer.  Make sure that the business broker has been able to create a Confidential Business Review of the business that paints  an accurate picture of what is going on with your operation.  There should not be any significant gaps that would cause a serious buyer to wonder why relevant information is not included.  That is one of the best ways to turn off a good buyer.  While no two businesses are exactly the same, they do share many common elements and the buyers want to compare these elements from business to business.

Finally, make sure you’re getting the word out to the right buyer. Have a complete understanding of what the business broker is doing to market your business.  Sometimes an owner will know of something that would help the marketing efforts of the broker and should let the broker know right away.  This might be something like a particular trade journal or industry conference.  Don’t forget that this is a team effort.If you need help you can contact us at Personal Websites

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