Selling Your Business? 10 Commandments to Avoid Wrecking the Deal

Selling a business is not as simple as selling a house. According to Tom West, “the ten commandments” are imperative to a successful business sale. Tom West is a founder and past president of the International Business Brokers Association (IBBA) and a frequent lecturer on all aspects of buying, selling, or appraising a business.

The 10 Commandments

1. Place a reasonable price on your business. An inflated figure either turns off potential buyers. Rely on your business broker to help you arrive at the best "most probable" selling price.

2. Carry on "business as usual." It’s important to maintain the company as a “going concern.”

3. Engage experts to ensure confidentiality. A breach of confidentiality surrounding the sale of a business can be detrimental.

4. Prepare for the sale by doing some “housecleaning.” Be sure your records are complete and do a literal sprucing-up of the plant or store.

5. Anticipate information the buyer may request. Bank financing will require the buyer to provide appraisals on assets.

6. Recognize the value of a motivated buyer as someone who will pay the right price for your business. Avoid the greed factor – sellers frequently lose buyer interest if they become greedy.

7. Be flexible. Don't be the kind of seller who wants all-cash at the closing, or who won't accept any contingent payments or an asset transaction.

8. Negotiate. Don't dominate. With your business broker's help, decide ahead of time when "to hold" and when "to fold."

9. Keep time from dragging down the deal. Timely communication of counter offers will keep the momentum up.

10. Be willing to stay involved. The buyer may want you to stay within arm's reach for a while. Consult with intermediaries to determine how you can best effect a smooth transition.

Sunbelt Business Brokers is the largest global business brokerage with 300 licensed offices worldwide. If you are interested in exploring business opportunities or are contemplating the sale of your business, call the Sunbelt Nanaimo office at 1-877-289-0969 or visit www.bcbusinessbroker.ca or www.sunbeltnetwork.com/vancouverisland.