1. Justify the Business asking price for both Buyer and Seller. Prepare a comprehensive Business Valuation using several methods of Valuation. We have access to thousands of comparable sold businesses throughout Florida and including the Tampa Bay Area. Not being able to justify the price is the #1 reason why most businesses never sell.
2. Set up financing to buy a business, pre-qualify the Business for SBA Guaranteed 3rd party financing. Buyers want to leverage their money. Sellers want to cash out, any third party funds make the deal a win win for both buyers and sellers. We work with many SBA Banks and we know which Banks will finance certain types of Businesses. This is the #2 reason why most businesses never sell.
3. Use a qualified experienced Business Intermediary to market on a confidential basis and negotiate. Vince LoCricchio is a Certified Business Intermediary and I can screen and pre-qualify potential buyers. Put a Business Marketing package together. Once you have the Price justified, financing in place, a ready willing and able buyer and a meeting of the minds are all that is needed.
There can be dozens of reasons why a business never sells; below are some of the most common:
1. Priced too high, no justification for the price (no basis for asking price)
2. Business cannot be financed. (Buyers want leverage, Sellers want to cash out)
3. Poor record keeping (tax returns).
4. Not packaged correctly. Need to explain full value of the company in writing.
5. Sellers won’t sell for what they make in a few years.
6. Business and accounts are too dependent on seller. (the business owner does everything).
7. Desirability (owners responsibility and hours required to operate successfully).
8. Management and employee not staying after the sale (family owned).
9. Outdated service and/or product (i.e., payphone business).
10. Too much working capital required. (not enough cash on cash return to justify risk)