How To Survive Your First Business Sale In Orlando
While it may sound a little dramatic the reality it is always best to be prepared at all times to be able to sell your business. You never knows what will happen in life and if you wish to or have to sell your business quickly in Florida there are some tools and measures that you will need to have in place.
Below are the “MUST Have” ready items when wanting to sell your business in Orlando:
1. Updated Tax Returns
Yes, updated tax records means one needs their most recent year Tax Returns completed. Business buyers do have higher expectations when they see a business for sale, just as a home buyer expects a house for sale to be in tip top shape a business buyer acts no differently. Business buyers do not want to hear “my accountant did an extension.” Remember your accountant works for you. If you need your tax records completed the accountant needs to be instructed to make them complete, and they can only complete that task if you have everything ready for the accountant.
When you receive the tax records, review them. Ask yourself if the tax returns make sense to you?
Do the financial numbers make sense to you? Will the numbers make sense to a potential buyer or a bank so they can offer a buyer financing?
If a business for sale cannot qualify for an SBA loan for a buyer, it does tend to lower the overall value because fewer buyers can afford to purchase the business.
2. Updated Profit and Loss statements and Balance Sheets.
The profit and loss statements typically itemize business expenses better than tax records do and often times they are easier for potential buyers to interpret. We had a Seller who was selling their business in Winter Park and they told us, they only do their accounting once a year and had no idea what their financials looked like until the end of each year. This was shocking to us because they had a net of $800,000 per year on average. We suggested they have their accountant do monthly statements. When we put that business on the market, it was under contract in 5 days. Why? It was prepared. The financial numbers were ready and we were able to put together a great package about the business that we prepared. Is your business broker preparing a detailed Buyer Memorandum on your business? If not, they need to. Businesses tend to sell quicker and for more money when a business for sale information package is put together for potential buyers.
3. Detailed list of Equipment.
Can you list everything that is included with the purchase of your business? If not, potential buyers will not be able to either. If you have big equipment or vehicles in your business, there needs to be a detailed list of everything included with the business. If you do not want buyers to think your brand new fancy pick up truck is part of the business purchase or you’re only including the necessary portion of the equipment and selling off the rest separately that needs to be made clear to potential buyers. That means business owners need to put together copies of titles, VIN numbers, when it was purchased, repair and maintenance records etc in addition to an equipment and asset list detailing what is included in the purchase of the business.
4. Process and Procedures in Place.
Business owners cannot assume that simply because they are bringing in an experienced buyer right away that they will automatically know where everything is and will require no training. A manual or even a contact list with vendor contacts, employee contacts and pass codes is a tremendous help for buyers after the purchase of a business. Recently our business brokerage sold an internet business for sale that had a robust Amazon account as well as an extensive list of wholesale customers such as The Container Store, Bed Bath and Beyond, and QVC. The business required a buyer to manage a lot of moving parts, but fortunately this seller was prepared and had the most amazing procedures manual in place digitally as well as physically in a binder. These procedures included contacts, emails, shipping instructions down to the size boxes and pallets that each customer likes. Yes, we all should go paperless, but this binder of procedures was worth millions to a new owner. It helps continuity and it makes a transition easier for both the buyer and seller and this booklet was one of the reasons the seller was able to receive an all-cash deal!
5. List of Staff
Buyers are looking for stability, continuity and a future when buying a business in Central Florida. They want to see an established and stable staff that are paid appropriately and paid on the books. Buyers want to have a good understanding of what each employee is tasked with and understand how they contribute to the success of the business. Having a qualified staff is always plus when selling a business. Sellers typically only stay on for so long, so buyers typically like the idea that they can ask a current staff member if they have a question. Having a contact list available for the buyer after the purchase helps with the transition. Just being able to tell a buyer that such a contact list exists makes them more comfortable with the business purchase.
6. Would you pay the asking price you have set for your business?
While this may seem like an obvious question, it is not obvious to most business sellers. Ask yourself, would you pay the price you’re asking for on your business? If not, why would a Buyer pay it? Business Buyers in Orlando are typically sophisticated, educated, and savvy. Ask yourself, can a potential Buyer obtain a loan for this business? If not, how will buyers be able to purchase it? Take the time to see if a bank will pre-qualify your business. Make sure it is not just any bank but a lending agent that specializes in SBA deals and can give you examples of deals they personally have completed.
If you are looking to do a deal right from the beginning contact us. The business brokers at Crowne Atlantic sell a large variety of businesses in the Central Florida and Greater Orlando area. We know that it takes time and skill to properly prepare a business for sale. We will meet with you confidentially and offer an opinion of value the business at no cost. This will help you decide if you’re ready to sell your business. Call us at 407-478-4101. There is no obligation and we will continue to keep all information that transpires confidential.
For more information on business brokers in the Orlando area or if you are looking to sell your business in the Greater Orlando or Central Florida area call Crowne Atlantic Business Brokers at 407-478-4101 or check out our website at www.crowneatlantic.com.
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