11 POINTS TO KEEP IN MIND WHEN SELLING YOUR OWN BUSINESS
1) Price realistically. You certainly don't want to price your business too cheaply,
but you can also come out short if your price is too high because you will
scare away a lot of qualified buyers. If it is overpriced, the business will be
on the market for a long time if it ever sells at all, and the longer it is on
the market, the greater the risk of your employees, suppliers or customers finding out. Look for comparable sales and price your own business within
2) Prepare a business offering package. All the information that buyers will
need to see such as lease and profit and loss statement should be quickly
available because buyers will lose enthusiasm if they have to wait.
3) Do all the deferred maintenance putting the business for sale. If buyers
look around your business and right away see items that need fixing then
they often wonder what else needs fixing that they cannot see.
4) Prepare a purchase agreement form before you find a buyer and fill in the blanks when you have a deal. Attorneys are
sometimes very slow in putting agreements together and the buyer's enthusiasm
can evaporate if the purchase is delayed.
5) Look for a buyer in as broad an area as possible. Don't depend only on you local paper to produce all the
leads because only a fraction
of the potential buyers are reading that paper at any particular time. The way to get the
best price is to attract as many qualified
buyers as possible.
6) Qualify the buyers right away. You need to know about their financial strength and business skills before you give out confidential
information on your business.
7) Make sure your space and equipment leases are transferable before you look for a buyer. Many, many potential sales have
blown up because landlord refuse to assign a lease. If your remaining lease term is short, negotiate a new lease
8) Make a deal with the buyer before you give him access to your financial records. It is extremely important
that the buyer have ample opportunity to examine your business. If he does
not and the business fails later, he may well sue you for mispresentation and
9) Make sure that every part of the transaction is in writing, including all contingency removals. People quickly
forget what was said and not written which frequently leads to arguments and then lawsuits.
10) Always take a substantial deposit when you have reached an agreement with a buyer. The deposit should be held by a neutral
escrow holder in order to help limit your liability.
11) Make sure if you are financing part of the sale, that the correct procedures are followed in order to protect your note. These include
filing of a UCC-1 statement with the State of California, suitable promissory notes, security agreements, etc.