California Small Business For Sale Deal Count Jumped 35% Last Month Says BizBen Index

September 10th, 2014

The number of deals completed on California’s business for sale offerings last month jumped 35% to 1,530 from 1,137 transactions recorded during August of last year, according to the BizBen Index. The late summer activity resulted in part from a backlog of sales contracts that were started, but could not be completed in the preceding months.

“We’ve seen a number of sales involving small and mid-sized businesses that went through delayed closings because of the time it took financial institutions to approve and then fund business purchase loans,” said Peter Siegel, MBA, Founder and President of BizBen.com, parent of the BizBen Index. “Lenders are becoming more involved in the business for sale market in California but they still are proceeding with caution.”

“Whether a borrower is working with an SBA backed loan program, a conventional lender or even with private investors, he or she is encountering more paperwork, and more rules, and is having to provide more detailed verification than was the case before the banking crisis and Great Recession.”

Siegel also said the August figure “helped push the year-to-date sales total to the highest it has been through the first eight months of any of the last six years. The market has yet to match the level of sales activity experienced through 2008. But with the backdrop of generally positive economic news, buyers and sellers are becoming more confident about prospects for continued expansion in consumer and commercial markets. A lot of people who put off their plans to buy or sell small businesses now are actively engaged in the business for sale market.”

Most of California’s largest counties recorded double digit percentage increases in the number of businesses sold last month compared to the same month last year.

Los Angeles County recorded 409 transactions, up about 25% from the tally registered in August last year. Orange County saw a boost of 30% to 155 transactions last month. The total of 58 deals completed in San Francisco last month represents an increase of about 45% from the sales count recorded last August. And Santa Clara County posted 105 transactions last month, up about 91% from the sales tally recorded the same month in 2013.

California’s business sales totals last month, by county, available at http://www.bizben.com/stats/stats-monthly-aug.php are as follows:

Alameda: 77, Amador: 6, Butte: 7, Calaveras: 3, Contra Costa: 30, El Dorado: 1, Fresno: 39, Imperial: 3. Kern: 25, Los Angeles: 409, Mendocino: 2, Merced: 9, Monterey: 17, Napa: 6, Nevada: 5, Orange: 155, Placer: 19, Riverside: 73, Sacramento: 47, San Bernardino: 67, San Diego: 117, San Francisco: 58, San Joaquin: 32, San Luis Obispo: 19, San Mateo: 26, Santa Barbara: 12, Santa Clara: 105, Santa Cruz: 15, Shasta: 2, Solano: 15, Sonoma: 19, Stanislaus: 33, Sutter: 7, Tehama: 7, Tulare: 19, Tuolumne: 4, Ventura: 28, Yolo: 9, Yuba: 1

The BizBen Index has been collecting and reporting information about small California business sales for 16 years, to help business owners/sellers, business buyers and the professionals participating in this market make informed choices and achieve success when selling or buying a California small business.

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For More Information:
Contact: Peter Siegel at BizBen.com
Phone: 866-270-6278  or  925-548-1892

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Working with a Business Broker from A Sellers Point Of View

September 5th, 2014

I always recommend working with a business broker when buying or selling a business. As a seller, there are many advantages to working with a business broker. A broker can assist with preparing the business for the sale, establishing a value, marketing your business, and screening and connecting you with potential buyers. Many sellers do not want to pay a broker’s fee. However, true professionals must charge for their services. Working with a business broker helps you to get the best sale price for the business and get it sold quickly.

Assistance with Preparation
The most important part of selling your business is preparing it for the sale. A good business broker will assist in prepping the business for sale when it comes to both the paperwork and physical aspects.

A broker will help you gather all the necessary documents to show to potential buyers. As far as the physical aspects go, a broker can provide insight on how to improve the physical appearance of the business to appeal to buyers. A good broker has managed the sales process in the past and they know what is going on in the current market.

Also, a business broker provides you with knowledge regarding the sales process that you may not otherwise have known or have access to. For instance, did you know you should get your business pre-qualified with a lender prior to entertaining buyers? A good business broker knows what options are out there and how they benefit the sales process.

Establishing a Value
You must establish a value for your business. Valuing your business too high can turn away potential buyers and valuing it too low will cause you to lose money. A business broker knows all of the different valuation methods and can help you figure out which one best fits your company when it comes to determining a sale price. They also know what similar businesses in the area are being bought and sold for which is useful when deciding on a final value.

Marketing Your Business
Brokers are extremely useful when it comes to marketing your business. They know where to market your business to prospective buyers. They will do more than just put a for sale sign on the door. They will get the business listed online and everywhere else they can. They are also able to tap in to their network when seeking out potential buyers.

Screening and connecting you with potential buyers
Marketing efforts will get you potential buyers but you really want qualified buyers. A broker will save you time and handle the screening process for you. As a business owner you don’t have the time to respond and follow up on every sales lead. Most of the time half of the potential buyers interested will not actually have the funds to purchase your business. A good broker will connect you with only qualified buyers that are a good fit for your company.

In summary working with a business broker is beneficial when buying and selling a business. From the seller’s point of view business broker is worth their fee as they will get your business sold quickly and for the right price.

 

About The Author: Peter Siegel, MBA is the Founder & President of BizBen.com, a website for businesses for sale, businesses wanted to buy, resources, & articles, and the BizBenNetwork Online Community. He advises and consults with business buyers, business sellers/owners, brokers, agents, investors, & advisors on a daily basis. Reach him direct at 866-270-6278 to discuss strategies regarding buying, selling, (or financing a purchase of) small to mid-sized businesses.

Rate of Transactions For California Business For Sale Offerings Rising In 2014, According to BizBen Index

August 7th, 2014

Dublin, CA (August 7, 2014)—California’s business for sale market posted 8,752 completed deals this year, through the end of last month, an increase of about 4.28% compared to the 8,393 transactions involving small and mid-sized businesses over the first seven months of 2013, it was announced by the BizBen Index monthly sales report. The company noted the growth in business sales this year slowed in July when the monthly deal count declined slightly to 1,306 from 1,327 transactions posted for July 2013.

“Overall, the market is in recovery as business purchase financing becomes more readily available and buyers and sellers become more optimistic about prospects for the economy,” said Peter Siegel, MBA, Founder and President of BizBen.com, parent of the BizBen Index. “The growth in the rate of small business transfers is mirroring broad trends in the jobs rate, home sales and other economic indices.” Siegel noted “the recovery is taking its time and is not consistent throughout the state.”

Among the state’s large counties showing increased business sales so far this year compared to last year are Contra Costa with 244 compared to 218; Kern, 209 vs. 179; Los Angeles, 2,357 vs. 2312; Sacramento, 331 vs. 271; and Santa Clara with 431 vs. 397.

Large counties showing year-to-date declines compared to last year at this time are Alameda at 355 compared to 399 last year; Fresno, 208 vs. 222; Orange, 889 vs. 916; Riverside, 374 vs. 420; San Bernardino, 372 vs. 417; San Diego, 766 vs. 776; San Francisco, 299 vs. 346; and Santa Barbara, 97 vs. 116.

July sales totals, by county, available at http://www.bizben.com/stats/stats-monthly-jul.php are as follows:

Alameda: 37, Amador: 3, Butte: 4, Calaveras: 1, Contra Costa: 24, El Dorado: 4, Fresno: 36, Humboldt: 3, Imperial: 1,Kern: 26, Lassen: 1, Los Angeles: 373, Madera: 3, Mendocino: 4,Merced: 1, Monterey: 20,Nevada: 3, Orange: 155, Placer: 10, Plumas: 1,Riverside: 66,Sacramento: 48, San Bernardino: 67, San Diego: 122, San Francisco: 19, San Joaquin: 16, San Luis Obispo: 12, San Mateo: 9, Santa Barbara: 15, Santa Clara: 65, Santa Cruz: 3, Shasta: 5, Solano: 13, Sonoma: 29, Stanislaus: 30, Sutter: 9, Tehama: 3, Tulare: 14, Ventura: 41, Yolo: 7, Yuba: 3

Sales totals posted by California county over the last ten years are available at: http://www.bizben.com/stats/stats-total.php

The BizBen Index has been collecting and reporting information about small California business sales for 16 years, to help business owners/sellers, buyers and the professionals participating in this market make informed choices and achieve success. The company recently launched the BizBen Network, the first nation-wide social network-powered Internet marketplace for small businesses. It is designed to provide a new level of support, with community-building interactive tools for buyers, sellers and professionals throughout the country engaged in small business transfers.

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For More Information:

Contact: Peter Siegel

Phone: 866-270-6278 or 925-548-1892

Retail Store Franchises For Sale: Are They A Good Investment?

June 4th, 2014

A retail store is defined as a business that will occupy retail space that sells products during specific hours that allow for ‘walk-in’ sales. Food and other service based businesses can also technically be considered as part of the retail industry. However, for our purposes let’s simply define a retail store as a business that sells products to customers. So, is purchasing a retail store a good investment? According to Entrepreneaur.com, only 10 of the top 50 franchises for 2013 are retail franchises. A retail store’s success is directly tied to the state of the economy. Retail stores can be expensive to run and face high competition. Let’s examine this further to help determine if buying a retail store is a worthwhile investment.

The Economy
Retail stores are directly affected by changes is the economy. When the economy is down, customers watch their spending very closely. Retail stores are the first to feel the effect of an economic downturn. It is currently forecasted, optimistically, that the number of stores opening is expected to exceed the number of stores closing this year. However, retail franchises of all sizes all will be struggling to remain successful, keep stores open, grow and come out profitable.

Expenses
Expenses for retail stores are relatively high as compared to other types of businesses.

Rents are high especially for those stores located in high traffic malls or shopping centers. Occupancy costs can range up to 18% of sales.

Labor costs for retail stores are typically 20% of sales. Labor costs include payroll costs, insurance and other employee related expenses. Retail stores are open for long hours, typically 10am to 9pm. Owners have to hire employees to staff the store if they plan not to work those long hours themselves. Owning a retail store is difficult for an absentee owner. It is extremely important that you have staff in place that is able to provide good customer service. Referrals are everything and a customer that has a bad experience doing business with you will be sure to tell all their friends causing you to lose potential business. You may have to pay more for quality staff.

Aside from high expenses associated with owning a retail franchise, you have to pay fees. Fees associated with owning a franchise include the initial startup fees as well as ongoing royalties based on sales. Fees vary by franchise. The Franchise Disclosure Statement discloses all fees.

Competition
Competition for retail stores comes from not only big box retailers and other retail stores but also from the Internet. It’s survival of the fittest. Those with strong brands, good marketing, excellent customer service, and accurate price points are able to survive.

Conclusion
In conclusion, a retail store is not a good investment at this time especially with the current state of the economy. The retail business is extremely competitive and is expensive to operate. There are other types of businesses on the market that can be purchased and operated with much greater ease.

About The Author: Peter Siegel, MBA is the Founder & President of BizBen.com, a website for businesses for sale, businesses wanted to buy, resources, & articles, and the BizBenNetwork Online Community. He advises and consults with business buyers, business sellers/owners, brokers, agents, investors, & advisors on a daily basis. Reach him direct at 866-270-6278 to discuss strategies regarding buying, selling, (or financing a purchase of) small to mid-sized businesses.

SBA Makes Changes To Their Loan Program

May 16th, 2014

The face of business financing has changed over the last several years. Lenders restricted their lending after the recession and have continued to be very cautious who they lend to. Only recently, as the economy has improved, have lenders started to relax their lending standards, but they are still being more cautious than they were before the recession.

The good news is that the Small Business Administration has made the process of obtaining financing a little easier. The SBA has implemented a couple changes in hopes of making the loan application process simpler and to give lenders more flexibility.

What’s New?

Two changes have been made to the SBA’s 504 loan program. They have eliminated the personal resource test, which is sometimes referred to as the wealth test. This test was used to eliminate applicants that did not have enough personal wealth. Previously applicants were required to use their own money to fund the businesses needs which meant that the SBA could reduce the amount of the loan they would back. Now applicants have more flexibility over how they manage their resources regarding the funding of a deal.

The second change is the elimination of the “nine-month rule.” This rule stated that applicants could only include expenses for a capital project that were incurred in the previous nine months prior to them submitting their application. The change to this rule means that a borrower can include expenses incurred at any time throughout the project. This gives a borrower more time to get their project off the ground.

The SBA made these changes in an attempt to increase the number of applicants that are eligible for financing. Since small businesses drive the US economy, the SBA is hoping these changes will help enhance job creation.

What Hasn’t Changed?

Aside from these two changes not much else has changed for a person applying for financing. Lenders are still cautious to who they lend to so getting a loan will still not be as easy as it was before the recession. With that in mind there are things you need to know if you are planning on applying for a loan in the near future.

Be Prepared

Just because the SBA has simplified the process that doesn’t mean you don’t have to be prepared. You should visit their site to learn about which loan programs are best for you. The changes I mentioned earlier only apply to their 504 flagship loan program.

You Still Need the Ability To Pay Back What You Borrow

While the SBA has made changes to make more people eligible for their loan products, applicants obviously still need to demonstrate the ability to pay back their loan. That means that they SBA won’t support anyone or everyone.

Have a Backup Plan

While the changes that have been made are designed to give people more access to capital that doesn’t mean you will automatically qualify. You should do research on alternative funding sources in the event that you do not qualify for a traditional SBA backed loan.

About The Author: Peter Siegel, MBA is the Founder & President of BizBen.com, a website for businesses for sale, businesses wanted to buy, resources, & articles, and the BizBenNetwork Online Community. He advises and consults with business buyers, business sellers/owners, brokers, agents, investors, & advisors on a daily basis. Reach him direct at 866-270-6278 to discuss strategies regarding buying, selling, (or financing a purchase of) small to mid-sized businesses.

Commercial Loans vs. Private Capital and Hard Money Loans: Which Should You Choose?

April 24th, 2014

An important part of buying a business is figuring out how to pay for it. Lenders are changing the way they do business which has fueled a demand for alternative financing opportunities. There are a variety of loan options available including commercial loans, private capital, and hard money loans. It is necessary to determine which type of loan is going to be the best fit for you. It is advisable to consult with a financing professional when trying to decide which option to choose. Let’s further examine the definitions of the different types of loans as well as their advantages and disadvantages.

Commercial Loans

Commercial loans are sometimes referred to as conventional or traditional loans. These loans are a debt based funding agreement between a borrower and a financial institution. Borrowers must go through a loan approval process when applying for a loan.

Private Capital

An alternative financing option is private capital. Private capital comes from an individual investor, a private capital group or an angel investor. This loan is secured with a contract or agreement and in some cases the investor is given a percentage of the company in exchange for their funds.

Hard Money Loans

Hard money loans are issued by private investors or companies. Hard money loans are asset based. The borrower puts up collateral in order to receive funds. The collateral is typically the value of their real estate.

Which One Should You Choose?

Trying to determine which type of loan is the right fit for your business financing needs can be difficult especially if you are going it alone. Going it alone can backfire and result in lost or bad deals. Due to my 25+ years in this business, I highly recommend working with a financing professional. A niche specialty loan broker will help evaluate your financing needs and make a recommendation that is based on their expertise.

If you are going to attempt to go at this alone, you need to contemplate each option and your evaluate your situation. Most borrowers get started by applying for a conventional loan and seeing if they get approved or not. If they are not approved they will then seek out alternative financing opportunities like private capital or hard money loans. Looking at one type of loan just because you did not get the other one is not always the best strategy.

There are advantages and disadvantages to each type of loan. Depending on the situation what may be an advantage for one person may be a disadvantage to another and vice versa.

Concerning conventional loans, one disadvantage to them is that you will be starting off your business in debt. A portion of your profits will have to be used to pay off the loan according to the payment schedule. Be sure to find a loan with the best rates and terms if you go this route.

Private capital and hard money loans are not readily available. However, with these types of loans you do not have to go through an approval process. The agreement is simply a contract between the investor and the business owner. Some may view giving up a percentage of their company as a disadvantage, but if you can find the right investor, one advantage may be that the lender can also become a mentor as they have a stake in the company too.

A disadvantage to a hard money loan is that interest rates are usually higher than a commercial loan and that is because the lender is taking a greater risk. Also, typically, hard money loans are designed as a short term loan solution.

In summary, each loan option has their pros and cons. I strongly suggest consulting with a professional to help you determine which type of business financing is the best fit for you!

About The Author: Peter Siegel, MBA is the Founder & President of BizBen.com, a website for businesses for sale, businesses wanted to buy, resources, & articles, and the BizBenNetwork Online Community. He advises and consults with business buyers, business sellers/owners, brokers, agents, investors, & advisors on a daily basis. Reach him direct at 866-270-6278 to discuss strategies regarding buying, selling, (or financing a purchase of) small to mid-sized businesses.

Selling a Franchised Business: What You Need To Know

April 11th, 2014

Selling a franchised business is slightly different than selling an independently owned business. When selling a franchised business there are key things you need to know in regards to preparation, approval, right of first refusal, fees and training. Details of what is allowed by the franchisor and what isn’t are located in the franchise agreement. I recommend reading your agreement thoroughly. Work with a business broker to help navigate the sales process and consult with the franchisor upfront about your intentions to sell. Following these recommendations will make you aware of potential challenges you could face throughout the sales process. It will also help you better assess potential buyers and ensure that you meet the obligations set forth in your agreement with the franchisor. If you are considering buying a franchise you should look into the details of the business before purchasing. That will help you choose a franchise with reasonable terms as well as let you know what you are in for when it is time for you to sell.

The key to a smooth sale of a business, be it an independent business or a franchise, is preparation. Let the franchisor know you are planning to sell and make the necessary preparations. Some franchisors will provide you with a checklist or guide which is useful in navigating the sales process. Also, working with a business broker is extremely useful as they will know how to get you through the sales process beyond what the franchisor provides.

Concerning approval, some franchisors will require that they approve a buyer. They will want to review a potential buyer’s financial status as well as their skill set and qualifications to ensure they are capable of successfully running the business and that their brand is in good hands.

A business broker will assist in the screening of potential buyers. They are experienced in the buying and selling of franchised businesses and know what to look for.

Another key thing to be aware of is the “right of first refusal” which means the franchisor can buy your business even after you have accepted an offer from a buyer. The “right of first refusal” clause can discourage potential buyers because they can go through the whole process of getting financing, doing their due diligence and making an offer, only to have the business pulled out from underneath them when the franchisor decides to buy it themselves. If this clause is built into your agreement, ask your franchisor if they intend to exercise their right to act on it.

In regard to fees, a new owner may be subject to a transfer fee. The fee is typically less than what the franchisee paid to purchase the business originally. However, potential buyers will want to know what the fee is.

A benefit to purchasing a franchise is that they usually come with tested standardized operation methods and procedures. When it comes to training, it is becoming increasingly common to have the exiting owner train the new buyer and that may also be expected by the franchisor. Check with the franchisor to know what is expected of you.

In summary, knowing what is in your franchise agreement and what is expected of you by the franchisor concerning preparation, approval, right of first refusal, fees and training will be important when selling your franchised business. Make the franchisor aware of your intentions to sell and work with a business broker to assist you throughout the entire sales process.

About The Author: Peter Siegel, MBA is the Founder & President of BizBen.com, a website for businesses for sale, businesses wanted to buy, resources, & articles, and the BizBenNetwork Online Community. He advises and consults with business buyers, business sellers/owners, brokers, agents, investors, & advisors on a daily basis. Reach him direct at 866-270-6278 to discuss strategies regarding buying, selling, (or financing a purchase of) small to mid-sized businesses.

Can I Get A Loan To Purchase A Business With Less Than Perfect Credit?

April 4th, 2014

Regardless of your credit score, getting a loan to purchase a business has become harder as lenders are more selective of who they lend to than they were before the economy crashed in 2008. A FICO score of 700 is the average lending threshold. For those with scores below 700 it can be difficult to obtain financing. However, it is certainly possible to get a loan to purchase a business even if you have less than perfect credit. However, it is important to be realistic about your situation and to take several steps to make yourself more appealing in a lender’s eyes. It is important to do your research, strategize, and be prepared and to structure a smart deal. Let’s examine these steps in further detail.

Do your research and strategize. Before you get pre-qualified know your credit score. You are entitled to one free credit report per year. If your score is low find out why and address the negative aspects to help improve your score. A specialty broker or business financing specialist can be of assistance as they know what lenders are looking for and they can provide you with advice on what you need to do to improve your score.

Certain types of businesses are considered high risk to lenders whereas others are seen as less risky. If you have less than perfect credit selecting a business that is considered to be less risky ups your chances of being approved for financing.

Be prepared. After taking the necessary steps to improve your credit score be sure to have an explanation for your score. Did you go through a divorce or have a family member fall ill? Although a good explanation will not erase a poor credit score it will help build credibility with a Lender.

Prepare a business plan. A solid business plan shows how you will run the business and how the business will make money. Essentially lenders want to have confidence that you know what you are doing and that you will be able to pay back the loan.

Structure a smart deal that is going to appeal to a financial institution. Lenders prefer to see deals in which the owner is also holding a note for part of the purchase price and offering training to the new owner for a period of time after the sale closes. This demonstrates that the current owner has faith that the new owner will be able to run the business successfully which will allow the borrower to pay back the loan. You may also need to be prepared to offer up collateral in order to secure financing.

Just because you have less than perfect credit doesn’t mean you can’t secure business purchase financing. Take the necessary steps mentioned above and consult with a specialty broker or business purchase financing expert to secure financing for your business purchase.

About The Author: Peter Siegel, MBA is the Founder & President of BizBen.com a website for businesses for sale, businesses wanted to buy, resources, & articles and the BizBenNetwork Online Community. He advises and consults with business buyers, business sellers/owners, brokers, agents, investors, & advisors on a daily basis. Reach him direct at 866-270-6278 to discuss strategies regarding buying, selling, (or financing a purchase of) small to mid-sized businesses.

The Pros and Cons of Buying A Gas Station

March 24th, 2014

There will always be a need for gas stations, regardless of the type of fuel they supply or may supply in the future. People are dependent on their personal vehicles to get to work and for other travel. These vehicles need fuel to operate and stations to dispense that fuel. Gas stations that are producing the highest profits have good locations and produce high volume sales. There are both pros and cons to buying a gas station. Let’s discuss some of them.

Pros

Demand

As previously mentioned, the demand for gas is there. People need to purchase gasoline regularly to fuel their vehicles so they can get to work, school, go shopping or wherever else they may need or want to go. Gas is a consumable product people need regularly. When the price of gas goes up people try to cut back their spending on other nonessential items. They may try to drive less or use public transportation but the way our country is set up with its highways, byways, thruways and freeways it essentially requires a vehicle to get where you want to go when you want to go. Some people view the ability to drive as freedom. We are a driving society and until that changes there will always be a demand for gas stations.

Alternative fuels are slowly starting to enter the market as a result of new developments from the fuel industry. But while the type of fuel we use may change in the future there will still be a need for fuel stations to dispense these new fuels. For the foreseeable future however, gasoline will still be the main source of fuel for almost all vehicles.

Additional Opportunities

Gas stations also can generate revenue by providing additional services like car repair and by selling convenience store items. If you find a gas station you are interested in that does not have either you may want to consider adding those options.

Labor and the Owner’s Role

Labor costs are generally low for gas stations because they do not require skilled labor unless you have an attached repair shop. Many gas stations are owned and operated by absentee owners although some do choose to work themselves in order to save on employee costs.

Cons

Competition

The largest con associated with buying a gas station is the amount of competition. Larger chains are dominating the market and pushing out independent gas stations. Retailers providing the lowest price fuel will get customers to travel to them.

Fluctuation

Gas stations are a relatively stable business model due to the demand for gasoline. However, fluctuations in the economy do affect customer usage and fluctuations in the purchase price of gasoline make it difficult to estimate profits.

Hours

Another con associated with buying a gas station could be the long hours. Many gas stations are a 24/7 operation. If you choose to be as well you will either need to work yourself, which requires a sacrifice of your personal time, or hire more employees to cover all the shifts which will eat into your profits.

In summary, the pros to buying a gas station include a steady demand for fuel, the ability to generate additional revenue aside from gasoline sales, and relatively low labor costs. The cons include high competition, possible long working hours, as well as economic and price fluctuations. In general buying a gas station can be a profitable business decision. But you should always consider the circumstances of any big decision and do your due diligence in order to make sure the pros outweigh the cons for your personal situation.

About The Author: Peter Siegel, MBA is the Founder & President of BizBen.com a website for businesses for sale, businesses wanted to buy, resources, & articles and the BizBenNetwork Online Community. He advises and consults with business buyers, business sellers/owners, brokers, agents, investors, & advisors on a daily basis. Reach him direct at 866-270-6278 to discuss strategies regarding buying, selling, (or financing a purchase of) small to mid-sized businesses.

Tips To Help You Sell Your Business Online

March 20th, 2014

Listing a business for sale online is the primary way that businesses for sale are marketed these days. Newspaper ads are a thing of the past because fewer people read newspapers and taking out an ad large enough to include all relevant information is just too expensive compared to the cost of an online ad.

You want to make sure that you create an ad that is going to grab the attention of potential buyers.  My advice is always to put as much information as possible into the ad. Make sure to include some financial information so when you get a call about your business from a potential buyer, that buyer already knows whether they are qualified to buy it and are not calling you just because they need more information about the business.

Here are 5 tips to help you create your listing and sell your business online.

1.  Drawing Attention To Your Ad

You want to draw a picture of your business starting with your ad’s headline so potential buyers know why they should buy your business.  Think of a catchy and descriptive headline that will grab the attention of potential buyers.  Most people are visual so make sure to include photos of your business as long as they don’t impact the level of confidentiality you’ve decided to keep.

Sometimes it is better to write your headline last.  By writing out the whole ad and then reviewing it you can look for things that jump out at you and use that information to write your headline.

2.  Be As Descriptive As You Can

You need to be as descriptive as possible about your business so buyers know exactly what you are trying to sell.  Include information about the history of your business, its current situation and the potential it has for growth in the future. ­­

You should add financial information as long as it does not impact your confidentiality. For example, people like to know how much they can expect to make a year on the business they are considering purchasing and how much it will cost them to purchase it.  You may also include such things as the number of current employees, any licenses that are required and anything else about your particular business that may be helpful to a potential buyer.

3.  Be Sure To Include Contact Information

This may sound like an obvious step, but you would be surprised how many people don’t include proper contact information.  You should give potential buyers more than one way to contact you. Don’t use the company’s phone number as you should be trying to keep your sale confidential at first.  Same goes for your email.  Creating a separate free email account just for the purposes of corresponding with potential buyers is something to consider.  Again, make sure you give potential buyers multiple ways to contact you as some people prefer to use certain forms of communication over others.

4.  Don’t Include The Exact Address

While I have stated that you should provide as much information as possible there are certain things you shouldn’t add. I stated above that you shouldn’t use the company’s phone number or email address as a way of communicating to potential buyers. You also shouldn’t include the company’s exact address in the ad. The reason for this is because you should be trying to keep the sale of your business as confidential as possible so you do not upset your employees, vendors and customers. Those people will have to be told eventually, but that information should come from you when the time is right and not from potential buyers wandering in and asking questions of your employees. Your business address is information that can wait to be disclosed until you are further into the process of the sale and the buyer has signed a confidentiality agreement.

5.  Consider Working with a Professional Business Broker

While you could use the information I have provided above and craft your own Business For Sale listing, I recommend hiring a professional business broker. Not only can a broker create the best possible For Sale listing for your business, but they can offer other services and information that will help you sell your business faster and for the best possible price.

About The Author: Peter Siegel, MBA is the Founder & President of BizBen.com (businesses for sale, businesses wanted to buy, resources, & articles) and the BizBenNetwork Online Community. He advises and consults with business buyers, business sellers/owners, brokers, agents, investors, & advisors on a daily basis. Reach him direct at 866-270-6278 to discuss strategies regarding buying, selling, (or financing a purchase of) small to mid-sized businesses.

SBA - Small Business Administration