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Precautions When Considering Selling A Business
Selling a business much be approached with as much planning and care as you would exercise with any other major business move. Too many businessmen decide to sell, and make a number of mistakes which reduce the price they get. We suggest that you take the following precautions once you have decided that you will sell your business.
One, do not tell competitors or staff or customers what you propose. Begin by placing advertisements in the press which do not identify you. Rumors that you are selling can affect your business badly - and very quickly.
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Two, before identifying yourself, ensure that potential buyers can afford to buy your business. Ask for details about their bank and/or financing information. Make sure they have the money to buy you out, and are not just "fishing". This will eliminate those with whom it would be fruitless to negotiate.
Three, once you have established a number of possible buyers, Google them. Find out about their financial stability , and business history. Find out if buying your business would make sense to them. If buying your business does not appear to make much sense to you, (from their point of view), put them aside for a while. You can always come back to them after you have talked to companies that are more serious.
Four, once you have identified yourself, do not let out too much information too quickly. Do not give confidential information which could be helpful to a competitor unless you are convinced that they are very serious. At this stage, just give sales, net profit before tax, net worth, and general details about the business and the industry.
Five, do not allow negotiations to drag on. The longer they go on, the more information you will have to give, and the greater the chance that word will get out that the business is for sale. However, it is not wise to negotiate with more than one buyer at a time. This can give buyers the feeling that they are participating in an auction. If you think they are dragging their feet, you should indicate that you will commence talks with the other parties waiting. This strategy should provide just the right amount of pressure.
Six, remain cool. Do not display the slightest amount of anxiety even if you are desperate to sell the business. Your outward attitude should be "if the price is right, I'll sell, if not, I'll wait until the right buyer comes along.
By following these rules, you will save yourself a considerable amount of time and frustration.
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