This comprehensive article will discuss some essential benefits of selling your small business on your own. Owning a small business can be an enriching experience. But eventually, there comes a time when you want to move on to a new venture or another project or retire. This is the time this article is relevant to you.
Whatever your reason for selling, you need to think carefully. The sale of your business is a one-time significant event with no “do-overs.”
Many small businesses are attracting potential buyers due to the recent volatile economic trend and interest rates. The companies increase their market share or enter a new market by buying a new business. Thus, the increased demand from buyers is creating opportunities for owners who are considering selling their businesses.
There are two options available when it comes to selling your business. The first one is that you sell your business on your own. And the second option is to sell through a broker. While working with a broker has some advantages, selling on your own has other benefits which you shouldn’t ignore.
Before moving further, let’s discuss what it means to own a small business…
What Is Meant To Own A Small Business?
A small business involves less capital investment with fewer labor and machines. It functions on a small-scale level; however, overall a lifeline of the economy. Small businesses are an essential part of the economy. They also contribute to creating job opportunities for people.
Owning a small business means having complete control and responsibility for the operations of a business venture. The owner makes decisions about all aspects of the company, including marketing, hiring, finances, processes, etc.
Most importantly, owning a small business also means the owner has equity. If the business owner decides to sell the equity, they can use that money to launch a new business venture.
Running your own small business also gives some fantastic financial rewards. Despite the high financial risk, it provides the chance to make more money. Moreover, it creates numerous opportunities to understand the various business functions better.
With that in mind, let’s turn to selling a hard-earned small business. What does that mean for the owner or seller?
When To Consider Selling Your Small Business?
The value of your small business highly depends on the market within which it operates. It would be best to sell when your business is good, not bad. Therefore, don’t sell when the market is facing a downturn.
If you are considering selling your small business, you must sell at the right time. Timing is one of the most essential factors. It is a crucial variable that maximizes the return on investment.
Although all businesses are different, there is a time when selling your business is a wise decision.
Below are some key points that tell you when to sell your business.
- You no longer enjoy running your business, so you must sell at the right time.
- Once a sale has gone through, you have an exit plan to follow.
- It is an excellent time to sell if the market is favorable and the business demand is high.
- You received another unsolicited offer or opportunity.
- The industry is growing, and the competition is increasing rapidly. Thus, it is an excellent time to sell before your business becomes unprofitable.
- Selling your small business will help fund your retirement.
Regardless of the stage of your small business, consider another external factor before selling. These include your local economy and the finances of selling a business.
Once decided, the success of the sales campaign is mostly dependent on marketing, assuming you have a solid business for sale.
Ways You Can Market Your Business For Sale
Entrepreneurs need to think about their business intuitively. There are many ways you can market your business for sale. But before that selling a business for sale requires a very detailed business profile. Hence, for that purpose, you need to update the business profile. You should get the social profile of your business right before you think of selling.
Fuzzy or disorganized records, undocumented procedures, glitchy computer systems, and messy work areas all spell risk for potential buyers. Therefore, you must eliminate all those threats to achieve the highest sale price.
It would be best if you conveyed the value of your business to buyers. Moreover, it would help if you also had a proper marketing plan to get the eyes of the buyers on your business listing.
The following are some ways you can market your business for sale.
1. Business Broker
Hiring a business broker is helpful as they can market your business. Through advertising, they can reach potential buyers by networking. The connections of business brokers are essential as they can market your business for sale.
However, don’t get confused; this article is all about how to avoid business brokers and still successfully win a sale.
2. Social Media
Many potential buyers are active on social media. You can promote your business for sale through platforms like Facebook, Twitter, and LinkedIn.
3. Business Publications
Advertising in business publications can increase your exposure to a broader audience. Thus, you can place the classified ads in local and national publications.
4. Trade Shows And Conferences
Networking at industry events to build relationships with other buyers would be best. Try to attend trade shows and conferences. Hence, you can find potential buyers who can purchase your business.
5. Leverage Your Website
Add a business-for-sale section to your website. Try to optimize the website for search engines so potential buyers can reach you by searching for businesses like yours.
However, be mindful that in some industries, telling the world that you are planning to sell your business is not recommended. This could create unnecessary tension among your employees and clients and eventually backfire on you and your business.
6. Direct Marketing
When you want to attract a limited pool of buyers, consider contacting them directly. You can either call, email or send them a letter. Furthermore, you can also get them through their social media accounts.
7. Online Marketplaces
Marketplaces like Gumtree can be very effective tools for finding potential buyers for your business.
Selling By Yourself vs. Selling Through A Business Broker
You have made a big decision to sell your small business. Congratulations! But before dreaming about a buyer walking through the door and buying your business, there is much to consider. One of the biggest questions is if to sell yourself or hire a business broker.
Selling By Yourself
As an owner, you can sell your business yourself, but you will be successful if you have an interested buyer or know how to find one. Selling a business by yourself requires the below essential skills and resources. (Done’t just jump into it if you are confident you don’t have them)
- Know how to determine the accurate and correct business valuation.
- Advertise on different platforms
that your business is for sale. - Conduct meetings with potential buyers.
- Discuss a contract with the buyers and to agree to final terms.
- Process all the documentation and paperwork and manage taxes of sale of a business with the support of your Accountant.
- Hire an Attorney who can help you with the final proceedings of the business sale.
Selling Through A Business Broker
Now let’s talk about selling your business through a broker.
Business brokers are just like real estate agents who sell properties and get a percentage of the sale. They specialize in buying and selling businesses.
Below are some reasons why you should sell through a business broker.
- You are not worried about the money or the control of the sales process
- Business brokers likely introduce multiple buyers so that sellers can choose the best one.
- They will handle the entire sale process.
- Protecting confidentiality is another benefit that a seller will get. Thus, the training of business brokers is such that they maintain their client’s confidentiality.
- Experienced brokers will guide you through due diligence.
- Advertising and marketing are essential for a business, and business brokers can help you with that too.
- To get the best possible terms for the sale of your business, they can help you negotiate with potential buyers.
In summary, selling by yourself or through a broker depends on your goals, expertise, and comfort level with the process. Business owners can sell if they have experience and knowledge of the sales process.
On the other hand, a broker can be the best option for those who want professional help in the sale process, and you are not worried about the cost of the sale and losing control over the sale.
15 Benefits of Selling Your Small Business On Your Own
Selling a business is a complex process as the owner devotes their time, energy, effort, and resources to building a business. However, there are also some advantages to selling your small business on your own.
We will now discuss the 15 best benefits of selling a small business by yourself.
1. Save On Commission Fees
When a broker markets or sells your business, they need an upfront fee. Depending on the value of your business, this commission can be tens of thousands of dollars. You can avoid the charges by selling the business and saving on commission fees.
When selling a business to a trusted family member or current employee, it’s best to route in some cases. Rather than hiring a broker or any third party, selling it on your own is much more cost-efficient.
2. Greater Control Over The Sales Process
Another benefit of selling a small business by yourself is greater control over the sale process. As an owner, you can easily set your timeline for sale. You are making all the decisions and taking all the actions.
For instance, setting the price, sourcing potential buyers, preparing all the marketing materials, conducting negotiations, and closing the deal…etc. Overall, this means 100% transparency over the offers you receive for your business. No broker is standing between you and the potential seller as an intermedium.
3. Direct Communication With Buyers
You can directly communicate with buyers, as selling the business yourself gives you this opportunity. It establishes better communication as you can solve and answer their issues. In addition, you can address their concerns faster than going through a broker.
4. Access To A Broader Range Of Buyers
These days business owners and their companies use different social media platforms. Some popular of them are Facebook, Twitter, LinkedIn, etc. Therefore, you can reach a broader range of potential buyers with social media, online marketing and marketplaces such as Gumtree.
5. Ability To Set Your Price
One essential benefit of selling a business by yourself is the ability to set your price. You can be more flexible with negotiations. However, selecting the right price is always a challenging thing.
It can be challenging if you don’t have experience in valuation and market analysis. It’s important to do your research and consult with experts. Thus, it will tell you you’re getting a fair price for your small business.
6. Increased Flexibility
First, you need to check how the market is responding. After that, you should make some changes to your sale strategy. Selling a business yourself gives you increased flexibility to make your decisions quickly.
7. No Obligation To Accept An Offer
When selling a business by yourself, you have no obligation to accept any offer that comes your way. Instead, you can say no or have the right to negotiate and get a fair offer. The proposal must meet your financial and personal goals.
You need to consider each offer carefully. Consulting with professionals, such as a business broker or attorney, is better when you need help.
8. Opportunity To Build A Good Relationship With The Buyer
Handling the sale process lets you establish a good relationship with the buyer. It will lead to a better understanding of buyers’ needs and requirements.
In this way, you can tailor your approach accordingly. As a result, you will build a trustworthy relationship and good rapport with the buyers.
9. Ability To Market The Business In Your Way
Marketing the business your way benefits you as the owner. It ensures that your unique selling points and values are appropriately aligned and communicated to potential buyers. You can highlight the strengths and competitive advantages of your small business.
Furthermore, you can emphasize how your business is better than others in the market. Your business must feel authentic to your vision rather than relying on someone else’s interpretation. For example, this will come in handy, if you are trying to sell a restaurant business in a competitive market.)
10. Better Understanding Of The Business And Its Value
As the business owner, you better understand the business, its potential, and its challenges. You understand it better than anyone else. Hence, it will enable you to showcase the strengths and weaknesses of your business better and more authentically than a broker.
11. Customizable Marketing Materials For The Business
You can create customized marketing materials related to your business. Thus, it reflects your small business’s unique selling proposition.
Create a one-page business overview before selling your business. It will highlight the critical information about your business.
It can include business history, financial information, offerings, and competitive advantage. This document can be easily customized for each potential buyer so that they can stick at your company more likely.
12. More Control Over Confidentiality
Managing confidentiality effectively is a vital component of a business sale process. Selling your small business gives you more or greater control over confidentiality. Moreover, it also ensures that your competitors in the market get less opportunity to learn about your business and plan to sell.
You can maintain confidentiality throughout the process. There is no need to disclose the information without knowing to whom you disclose it to.
13. Higher Returns
Higher returns are another great benefit of selling a business by yourself. You can negotiate with the potential buyer and get a higher selling price for a business. You can get the best cost for your small company compared to a broker if you have good marketing and negotiation skills.
14. Personal Touch
Selling a small business is a personal and emotional transaction. When you handle the sale process yourself, you and the buyer have a personal connection. Similarly, you and the buyer share the same goal. All these things are an essential part of a fabulous deal.
15. Faster Process
The selling process becomes much faster as you sell your business independently. In short, you don’t have to go to a broker to conduct the whole procedure or be limited by broker’s rules. The best thing about selling by yourself is that there will not be any prolonged waiting period and fewer miss opportunities due to delays.
Saying so, selling the business by own is not a good recipe for everyone.
When Shouldn’t You Sell Your Small Business On Your Own?
Business owners or entrepreneurs should think twice before selling their company. Selling a business is a crucial step that requires the experience of a dedicated professional sometimes.
The following are some situations where you should refrain from selling your small business alone.
- Working with a professional broker is better if you lack experience and have never sold a business.
- You, as a business owner, might have a limited network. On the contrary, brokers have a more mature connection with potential buyers. Thus, it will increase the chance of a successful sale.
- A business owner should not sell their company if they have time constraints.
- Sometimes the structure of a business is complex both financially and legally. Therefore, it is best to work with a professional.
- As a business owner, you are probably not dealing with the best buyers.
- Asking for the wrong price can cost you, so choose wisely.
- Maintaining confidentiality is essential. Information leaks through negligence can alert competitors to your moves. Make sure to hire a broker who understands how vital confidentiality is to you.
Conclusion
Selling a small business yourself can be a cost-effective way to market and sell your company. By doing this, you can save the broker’s fees and have great control over all the financial and marketing processes. Moreover, the potential buyers have direct access to you as a seller, and you can guide them promptly.
However, it is also important to note that selling a business takes time. It is a complex process, so it is good to take advice from legal and financial experts before making any decision.
With proper research and careful planning, selling a business can effectively achieve your desired outcome.
Overall, a small business selling on your own can be a rewarding and profitable experience.
Thanks for reading!
