Preparing To Sell A Business In Rochester, MN
Once a business is on the market, it is difficult to make changes to the business or to reconsider the asking price, what is included in the sale, or to try to make it more marketable. This is why it is so essential to work with an experienced broker before you try to sell a business in Rochester, MN or anywhere else across the state or the country.
Too often a small business or a family business tries to save money by handling the sale on their own, or only bringing in an attorney and an accountant once the sale is more than a handshake deal. The problem with this approach when you sell a business is that you miss out on the potential to increase your earnings from the sale by l completing a few adjustments to the existing way the business operates.
Know your Assets and their Value
An initial valuation is a key component when you sell a business. This needs to be completed in advance to even entertaining offers on the business.
General, when most family businesses, startups and entrepreneurship go on the market without a valuation by a qualified business brokerage firm, the initial asking price is well above fair market value.
This happens for several reasons. The most obvious is that the business owner has so much of their personal time, energy and effort into growing and managing the business that they often overvalue what it would be worth. Unfortunately, a buyer really doesn’t care how much you worked or how long it took to get the business to the current level; they only care about what the actual value is right now at the moment they make the offer.
Formalizing Working and Employee Relationships to the Business
Without paperwork and documentation of customer contracts that extend into the future as well as a commitment by current management and employees, it can be very difficult to sell a business, even a profitable company.
This is because when you sell a business if there aren’t formalized contracts and agreements, the buyer may have concerns about how to continue to operate the company and how loyal the customer base will be.
By having contracts and working agreements in place before you sell a business, potential buyers have limited risk in facing these potential issues. Of course, having past records in order and ensuring your Rochester, MN business is current in all financial documents and accounting requirements also assists a buyer in understanding the worth of the business and what they can reasonably expect.
