Here is part 5 of our 10 do's and don'ts of business selling. We gained these insights from hard-won experience and observing what can happen in the business selling market!
5. DON’T – Consider the sale of your business simply as a chance to pay off your loans and debts
Do – Sell for the right reasons
Think carefully as a business owner prior to taking your business to market with an advisor or broker, or selling it yourself, as to the reasons and objectives you have for selling.
This helps you create a negotiation framework to determine what an acceptable offer might be.
Sometimes we see business owners wanting a certain amount for their business and that amount is not necessarily determined by what the market would likely pay for the business, but rather it’s determined by the amount of outstanding loans the business owner has with the bank.
It’s a legitimate objective to sell your business in order to consolidate your financial position and pay off loans, however if the value of the business is simply driven by your amount of outstanding loans, in many cases you may well be disappointed in the business sale process.
In other words your objectives aren’t necessarily lined up with what’s achievable.
If you would like advice or support to sell your business, contact the experienced team at JPAbusiness for a confidential, obligation-free discussion.
From the JPAbusiness archives, refreshed and checked for accuracy November 2016.
James Price has over 30 years' experience in providing strategic, commercial and financial advice to Australian and international business clients. James' blogs provide business advice for aspiring and current small to mid-sized business owners, operators and managers.