Fundamentals of Selling A Business - Marketing and Prospecting the Buyer
To successfully sell your business, it is essential that you know how to communicate its appeal, and understand the factors that potential buyers have to consider.
There are hundreds of businesses for sale at any given time. To make your business stand out, you need to provide potential buyers with information that help them to make informed decisions. A descriptive and well-organized selling memorandum will help in the sale process.
The memorandum would provide your contact information, a brief description of the business, business location, hours of operation, business asking price, annual revenues, net earnings, number of employees, ownership description, number of years established, leased or owned property, and the reason for selling. You should also include a few paragraphs to describe the benefits of owning the business.
Potential buyers should sign a confidentiality agreement before you furnish them with the selling memorandum. This memorandum should be true, accurate, and complete. Marketing paraphernalia typically included are photographs of the business, company history, overview of operations, financial summary, company strengths and potential opportunities, as well as a list of assets.
Prospecting the Buyer
Potential buyers should be screened to ensure that their interests are compatible with yours and that they have the financial ability to purchase your business. Early in the selling process, you should determine the buyers' sources of funds. Determining and dispelling any misconceptions on financing prior to negotiating the deal saves both parties time and money. You may want to suggest that the buyer consult with their accountant or financial advisor.