One of the enjoyable aspects of business brokerage is meeting with business buyers. Some are experienced, most are green and would be considered first-time buyers. Typical first-time buyers meet with us to discuss the process and ascertain whether they can financially put a deal together. One of the most intriguing parts of our discussions with first-time buyers relates to what kind of business they are looking to purchase. When asked what kind of business they would like to buy, the vast majority of response is “well, just tell me what you have and I’ll let you know if I’m interested”. This approach certainly works, yet there is another way to zero in on the right business.

Buyer Searches

With the right technology you can find the business you really want, rather than choosing from the current list of inventories. We have a database network that allows us to use a rifle approach to put the crosshairs on the business that is right for you. The technology allows you to fine tune your search with the following factors:

By Industry

Businesses are categorized by SIC Codes (Standard Industry Classification Codes). There are general categories to choose from like manufacturing, distribution, retail, restaurants etc. Within the general categories are literally hundreds of sub-classifications. Under manufacturing you may be interested in everything from nuts and bolts to cabinets and countertops. The selection is huge. Take a look at this website for SIC Codes – www.SICcode.com.

By Size

This generally means by revenue or level of profit. Typically, when you choose the size of business you are limiting in scope your interest by the amount of capital you bring to the table and the financing you qualify for. The selection of specific businesses under the general classification codes may help stimulate ideas about which businesses are a good match for you.

By Geography

Are you only interested in a Wasatch front based business, or are you looking for one in Tucson, Arizona? The technology allows us to look at any area in the country by zip code.

Selecting from our current inventory of businesses (shotgun approach) may work just fine for you. If not, consider zeroing in (rifle approach) by choosing the industry, size and geography that really makes sense to you, and find a business that is a great fit. The only thing more enjoyable than meeting with buyers looking for businesses, is finding one that becomes a match.

 

-Bradley G. Marlor MBA, M&AMI, CBI is a Managing Partner at Utah Business Consultants and a Certified Business Intermediary. Utah Business Consultants is a full-service Business Brokerage and Valuation firm

In part one of this two-part blog series, we went over some of why it’s important for those attempting to sell their business to be prepared for surprises along the way. Selling a business will follow some general steps, yes, but there can be a few unexpected hiccups you have to be on your toes for.

At Utah Business Consultants, we’re proud to provide assistance with any area of exit planning or selling your business, including preparing you for any surprises that may show up during the process. In today’s part two, we’ll dig into a few areas of price flexibility, confidentiality and keeping a focus on your business even while it’s in the process of being sold.

Offers Versus Listed Price

As the seller of a business, you’ll have a general price in mind when it comes to selling. You’ll usually want to be aggressive here and post a strong pricing structure.

A reality many sellers are not fully prepared for, however: The first offers here will usually come in significantly lower than the price you’ve listed. You have to be ready for this, as it’s simply part of the negotiation process. Rather than simply being insulted and turning down all offers that don’t meet your threshold, you should work with an intermediary like ours to set a price structure that can work for both sides and allow for good-faith negotiation.

Confidentiality Concerns

We mentioned confidentiality in part one of this series as it relates to your own operations and involving managers or other staff members, but there’s another side of this to consider as well. In some cases, particularly if your business is well-known locally or nationally, word may leak out that it’s for sale or the confidentiality may become exposed.

You must have a contingency plan in place in case this happens. This is usually just a simple explanation that growth capital is being considered or expansion is being investigated.

Inflexibility

While we understand many business owners are used to being in charge and want to retain this control during the sale process, it’s important to realize that there are areas where flexibility is vital. While standing firm on a few major price points or sale contingencies is fine, demanding your way on every single item ultimately won’t lead to good results. Be prepared for some give-and-take during the process.

Losing Focus on Business Operations

Finally, one of the chief reasons why business sellers employ business brokers like ours is to allow them to retain their focus on the business. Your business doesn’t suddenly shut down when you consider selling it – maintaining its operations is vital for keeping its value high until the sale goes through. Buyers will want to know how the business operates, even during a potential sale period.

For more on being prepared for unexpected events during a business sale, or to learn about any of our business valuation or exit planning services, speak to the staff at Utah Business Consultants today.

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