For any business owner in the process of attempting to sell their company, finding a serious buyer who is both qualified and engaged in the situation is vital. There are sadly some prospective buyers out there who either aren't qualified to buy your business or might be engaging with you for certain nefarious purposes, and being able to weed these out from the serious buyers is an important task for saving time and protecting your interests.

At Utah Business Consultants, this is one of several areas our business brokers are happy to assist clients in while we help you sell your business. We have decades of experience in this field, and all the skills you'll need to differentiate the serious buyers from those who you should steer clear of. This two-part blog series will begin by going over some of the positive qualities that often indicate a serious buyer, while part two will focus on the flip side and red flags that should signal a buyer isn't for-real.

serious business buyers signs

Asking the Right Questions

One of the earliest and simplest signs of a serious, dedicated buyer for your business is someone who asks a lot of questions about your business. Obviously, the right questions will vary for most businesses, but what you're looking for is someone who is curious about the inner workings of your company and especially interested in how it all ties into their proposed plans going forward.

Questions that show they actually took some time to research the market and understand the industry, even if it's superficially, are usually positive. A prospective buyer who doesn't follow up on questions you answer with further intelligent questions is a red flag. More knowledgeable buyers will be able to make connections from your information and connect those dots between how what they learn about your company may play into their own business plan going forward.

Evaluating Capital Expenditures

One of the first areas any prospective buyer should show interest in is your company's list of capital expenditures. A business buyer who sets aside investment funds for improvements is generally interested in growing the company and wants to be engaged at a more engaged level than someone who prefers to see their business stay status quo or even slowly decline.

Wages and Salaries

Any possible buyer for your business should also want to know about your company's wages and salaries. While some buyers want to cut these costs, especially in highly competitive markets where labor costs are skyrocketing, others are interested in investing those funds into better equipment or even outside help that can aid their expansion plans. Again, the right questions here send a positive signal that the buyer is interested in growth and improvement, rather than simply looking for a quick resale by cutting all ties to what they're buying.

A Serious Buyer is Ready to Make an Offer

The most important signal that you're dealing with a serious buyer is when they are prepared to make an offer on the business, especially after proper due diligence has been completed. While some buyers might be prepared to make a bid earlier in the process, others prefer to wait until they know for certain what they're getting into. The important thing here is when a buyer has been doing their research and willing to pay you accordingly for your business, it's usually a signal they are serious about actually buying your company.

For more on how to spot serious business buyers and avoid illegitimate ones, or to learn about any of our business brokers or how we serve clients throughout Utah, speak to the team at Utah Business Consultants today.

In parts one and two of this multi-part blog series, we went over some of the most common mistakes business owners make while selling their business. Avoiding these is important as you move through any business sale process, ensuring you don't hit any pitfalls as you move forward.

At Utah Business Consultants, we're here to help clients with a wide range of business sale and exit planning needs, including steering them clear of the errors they need to avoid in any such process. Today's final entry in our series will go over a few other mistakes not to fall victim to as you're proceeding with your sale.

avoiding business sale errorsInability to Walk Away

For whatever reason, some sellers simply get so invested in a potential sale that they become emotionally tied up in the process. This is not an advantageous position to be in, as you cannot make clearheaded decisions if your emotions come into play.

The best way to avoid this pitfall is to set a firm deadline for yourself and stick with it, regardless of how much progress you think you're making or how many of the hurdles you've cleared seem to be. While you should allow bits of wiggle room for the occasional setback, you don't want to set yourself up for an extended sales process that drags on and on. Saying "no" is hard, but it's important.

Waiting too Long

Another common mistake by business owners is waiting until the last minute to make their exit. They wait until business has begun dropping, for instance, or until they feel they've maxed out their earning potential. This is a mistake for a few reasons:

And to compound things, many business owners will wait too long to sell -- and then will jump at the first offer that comes along. You want to make sure you've given yourself enough time to shop around for the best possible deal, not simply settle on the first one that's presented itself.

Being Indecisive

While it's completely natural to take the time to research and understand your business sale options, there comes a point at which you need to make a decision. Trying to hedge your bets by exploring too many options simultaneously can actually lead to decreased odds of success, as potential buyers will become frustrated and move on.

On the other hand, if you're too quick to make a decision without proper consideration, you may regret that choice down the road. So how do you find the best balance between indecisiveness and rash decision-making? You talk to experts, like the professionals at Utah Business Consultants. By taking into account the desires of your business, your budget, your timeline for exiting and more, our team can help you make an informed choice that will lead you toward success.

For more on how to avoid common mistakes while selling your business, or to learn about any of our business sale or exit planning services, speak to the staff at Utah Business Consultants today.

In part one of this multi-part blog series, we went over some of the most common errors made by sellers during a business sale situation. While taking the right actions during your sale is important, just as vital will often be knowing the pitfalls to avoid as you look to complete a profitable sale.

At Utah Business Consultants, we're happy to assist Salt Lake City and other Utah clients with numerous areas of selling their business, from business exit planning services through numerous other parts of the sale process -- and we have extensive experience in the business sale realm that allows us to steer all our clients well clear of any major errors as they move through this process. Here are a few more of the most common such mistakes we see, plus how to make sure you avoid them and focus on the important elements of your sale.

business sale errors research advisorsLack of Buyer Research

Knowing your buyer is of vital importance when selling a business – yet this is a step that's all too often skipped or glossed over during business sale planning. It's not enough to simply know your industry and some of the bigger players in it; you'll need as much specific information as you can get on those prospects who are showing serious interest in your company, including their ability to finance what you're looking for in terms of purchase price.

Asking the right questions when vetting potential buyers is just as important, and far too many sellers skip this step in order to get to the point where they're already negotiating with someone. Before you ever get to this point, you'll need to know about things like their most recent business sale, what kind of financial track record they've had, whether or not they're industry insiders and their reputation in general.

Misunderstanding Deal Structure; Leaping at Raw Numbers

As a seller, you must avoid the temptation to simply see a big number presented to you in an offer and immediately accept it, no matter how good it looks. The fact is that big numbers can indicate several things – most often, buyer desperation to get into your business, but also perhaps an unrealistic appraisal of the company's worth or its current financial situation.

The worst thing you can do in this case is accept a deal based on these raw numbers alone; rather, you need to investigate the specific structure of any offer that's been given. For instance, if a buyer is offering you $500,000 in cash for your company, does this include all of the financing required to get the deal done? Or will you need to still secure some outside funding? If so, what are the interest rates being offered? These and many similar areas are those we're happy to assist you with in our role as business brokers.

Refusing Outside Advisors

While no one would ever deny that you know more about your business than anyone else, this doesn't necessarily qualify you to sell it without any help from professional business brokers, advisors or other knowledgeable parties. Getting stubborn and assuming you're the best one to handle your business sale might lead you to overlook problems that could otherwise be avoided.

A good example of this is when a seller tries to sell his or her company without involving an attorney -- while this is indeed something that can often be done, it's also dangerous due to the number of legal issues which must be handled in the process. By acting on your own behalf, you could overlook or mishandle some vital part of the sale that only an attorney is qualified to handle -- and this too often results in buying yourself extra time on a move that's already gone bad.

For the very best in business sale assistance from longtime pros throughout the great state of utah, contact us today at Utah Business Consultants.

As a business owner in the process of selling your company, you naturally want to to everything you can to help the process flow smoothly and work out as desired. This involves a few different concepts, one of which is staying far away from some of the common errors we see sellers make in these circumstances.

At Utah Business Consultants, we're here to help our clients avoid these kinds of mistakes and put them on a positive path to a productive business sale. What are some of the most common errors we've seen made through the years, and how can you be sure to steer clear of them? This multi-part blog series will go over a number of concepts.

business sale errors valuationImproper Valuation

Perhaps the single most common mistake we see during business sales, and one we offer specific business valuation services to combat: Setting the price too low. It's easy to see why this happens—sellers are looking for the best possible deal, and don't want to overprice their company for fear of scaring away buyers.

The downside is that by undervaluing your business you're essentially asking buyers to offer pennies on the dollar because you haven't adequately conveyed its true value. Even if you don't end up setting the price too low, buyers will still know that you're not willing to negotiate on certain topics (price is always one), and this can cause them to seek out business owners who are willing to negotiate harder.

By the same token, sellers should never inflate their company's valuation either. Setting your price too high will immediately turn buyers away, not just because they won't be willing to pay that much but also because there's the chance that it could start a bidding war. This can drive up the final sales price, but it will require multiple potential buyers and take more time than you're probably interested in.

Improper Preparation for Sale

Selling a business involves several areas of preparation, such as understanding your company's true value, understanding buyer psychology, and crafting an effective sales pitch. If you rush the process or neglect one or more of these areas, then it can lead to a lower price tag, longer sale timeline, or both.

One of the most important steps in preparation is to make sure you keep all documentation regarding your business up-to-date and organized. This includes everything from your company's financial statement and employee contracts to its online presence and other technology tools.

Another common mistake we see is rushing the sale preparation stage, as if a quick turnaround will help you get it out of the way as fast as possible. But if done properly, the sale process can take months or even years. It's certainly not something to rush through, and rushing can actually increase your chances of making a mistake that will cost you money.

For more on avoiding common business sale mistakes, or to learn about any of our business valuation, exit planning or other business sale services, speak to the staff at Utah Business Consultants today.

In part one of this two-part blog series, we went over some basics on how to help differentiate your business from others in your industry if you're looking to sell. Buyers are always looking for unique qualities that will draw them in, and being able to highlight these well is often a vital part of listing your business for sale.

At Utah Business Consultants, we're happy to assist clients with every part of their prospective business sale, from proper business valuation through numerous techniques that will help you promote your business and get it in view of ideal buyers. In today's part two of our series, we'll go over a few other themes and tips for helping distinguish yourself from others on the market, especially those in your industry.

business stand out price intangiblesPrice Edges

If your business boasts a price advantage over some or all of your primary competitors on the market, this is a major strength worth leveraging in your marketing and promotion of the business. This edge can be a function of any number of things, such as:

Whatever the cause, your business having a price advantage over some or all of its competition is well worth drawing attention to during your sale. This is an important point in countering the general tendency for buyers to assume the market rate in any given area is the most competitive price.

Difficulty of Replication

Another primary feature to highlight, if present, is any products or services you produce that are difficult for competitors to replicate. This can take many forms, but it's usually best if the difficulty of replication is inherent in the product or service itself, rather than a function of something you do that poses an obstacle for other businesses.

Some examples might be:

Other Intangibles

Finally, there are certain other intangibles that will often attract buyers in small ways. A long, business-friendly lease in your building, for instance, may not be the kind of thing that will entice a buyer to make an offer, but it can help push your sale over the top in certain close cases.

Other types of intangibles that might interest buyers are things like customer lists, proprietary software, proven advertising programs, and more.

For more on how to highlight the best attributes of your business to position yourself for a sale, or to learn about any of our exit planning or business sales services, speak to the staff at Utah Business Consultants today.

Business owners are often looking for the qualities that separate their company from others, and this remains true even in cases where you're thinking of selling your business. Your unique qualities will often be some of the most attractive to prospective buyers of your business, so knowing and highlighting them is a central part of navigating a successful sale.

At Utah Business Consultants, we're here to help with a wide variety of business valuation and business sale services in Salt Lake City, including assistance with a number of different elements that will help you promote your business's unique characteristics. In this two-part blog series, we'll go over some of the specific themes you might look to highlight and promote while you look to help your business stand out on the market.

business stand out sellerMarket Position

Perhaps the single most important quality a prospective business buyer will be looking at is the company's standing within its market. If you're producing a product or service that stands out from the rest, or if your company boasts a special kind of relationship with customers, then those qualities will be just as important to highlight as they are in any other context.

It's often worth thinking about market position in terms of both relative and absolute positioning. In relative terms, you'll be looking to demonstrate the ways in which your company differs from its competitors or market rivals. In absolute terms, you'll want to elaborate on the kind of reputational capital your business has managed to build up within its industry.

In both cases, it's important that you're able to clearly and effectively illustrate these qualities to prospective buyers. Keep in mind that the language you'll want to use will likely need to be oriented a bit more toward business and finance professionals, rather than your everyday customers or existing business contacts.

Brand Name and Brand Identity

In addition to the actual standing you have in the market, buyers want to know that your company and products are recognizable through a strong brand. When buyers know that your company is instantly familiar to many of the client bases you are selling to, they will generally be much more interested.

Robust Customer Lists

Over the years, your company may have built up several different email lists, subscriber lists and others that help you track your loyal customers. These will also be very important to prospective buyers, as that kind of information can be quite valuable in the years ahead.

Strong Relationships with Important Suppliers

Buyers will also be interested to know what relationships you have been able to build up over the course of your business career, as this may speak volumes about your ability to work effectively both internally and externally.

For more on how to help your SLC business stand out if you're putting it on the sale market, or to learn about any of our business brokerage services, speak to the staff at Utah Business Consultants today.

In part one of this two-part blog series, we went over some basics on why it pays to hire a professional business broker when selling your business. While you may think you can handle all the important factors here on your own, attempting a detailed business sale on a DIY basis comes with a number of potential pitfalls, including major risks like deals falling through or significant money lost.

At Utah Business Consultants, we’re happy to help with a variety of business sale needs, ensuring business owners and other employees are free to keep their focus on their daily tasks at hand while also maintaining precise valuations, quality buyer sourcing and many other elements. What are some of the other top risks associated with attempting a complex business sale on your own, without the assistance of a broker? Here are several.

risks DIY business sales buyersNo Qualified Buyers

One major area where business brokers provide value to business owners looking to sell: Identifying not just interested buyers, but also qualified ones. It’s important to note the difference here, as it’s likely you’ll have plenty of initial interest when you list the business for sale – but far fewer entities who are serious about their interest, plus have the resources to follow through.

Our business brokers have decades of combined experience, and we know how to identify qualified buyers quickly. We even have go-to resources for numerous industries, allowing us to source buyers immediately in many cases.

Timing Concerns

Due to a variety of factors, including the fact that you’ll be spread thin if you attempt a business sale while also trying to run day-to-day operations, a DIY sale often leads to timing issues. There are simply a huge number of details involved in most business sales, and the typical business owner doesn’t have enough hours in the day to handle these plus their normal job. Business brokers, however, will handle these details on your behalf.

Contracts that Don’t Go Through

While we wish it were not the case, up to 40% of signed business sale contracts never make it to closing. Whether due to due diligence, improper financing, overlooked legal issues or other concerns, there are many pitfalls – but far fewer if you work with a qualified business broker, who will identify these risks ahead of time and steer you clear of them.

Remaining Objective

Finally, there’s a simple reality at play here: It’s hard to stay objective about a business you own, especially if you founded it from the ground up. This may lead to unrealistic valuations or pricing, which in turn will risk upsetting potential buyers and torpedoing your sale. When you work with a business broker, however, they bring the objectivity you need to the situation, informing you of situations where you’re being unrealistic or stubborn.

For more on the importance of utilizing a business broker for your business sale, or to learn about any of our assistance with selling or buying a business, speak to the team at Utah Business Consultants today.

While the do-it-yourself (DIY) world is robust and valuable for many walks of life, there are exceptions here as well. One great example: The world of business sales, where it’s technically possible to sell a business without the assistance of a business broker – but this is a process that comes with several major risks and generally isn’t recommended, whether you’re selling a large business or a small one.

At Utah Business Consultants, we’ve assisted numerous clients throughout Utah with selling a business, helping them hit the important crux points in the process and receive optimal value for their company. What are some of the major risks of attempting to sell your business without the assistance of a quality business broker, and how will our brokers help you avoid these concerns? This two-part blog will go over several factors.

risks DIY business saleImproper Valuation

The first, and perhaps largest, risk of moving forward with a business sale without the assistance of an experienced business broker is the potential for improperly valuing your business. There are numerous factors involved in pricing a business accurately, from the state of the market and competing businesses to the number of employees, assets on-hand, profitability and a plethora of others.

Simply put, if you don’t have expertise in this area, you’re likely to miss at least some of these factors. You’ll also likely start at a disadvantage in terms of understanding different buyer types and how deal terms might appeal (or not appeal) to them. You might end up pricing the business way too high and not attracting any buyers; on the flip side, you could price the business too low and cost yourself important money in the process.

Drawbacks in Other Areas

It’s also important to note that selling a business is a detailed, often-intense process – one that requires significant time and attention on specific details. At the same time, it’s vital to keep a business running properly during sale negotiations, as failure to do so may diminish a buyer’s interest.

And if you’re a business owner or manager trying to both manage a sale and perform all your other tasks, this will create major issues. Companies whose owners attempt this often see major decreases in marketing quality, for instance, plus in other areas where the owner is typically involved on a day-to-day basis. Working with a broker, however, leaves you free to focus primarily on your job while letting our team handle the major legwork of the sale.

No Transaction Expertise

If you’ve never sold a business before, you might not realize how complex these arrangements are. Transactions for the sale of a business are incredibly detailed, plus include areas that business brokers are specifically trained to be knowledgeable on. You’re putting yourself at a major disadvantage if you try to negotiate on your own, including certain risks that might even void the sale due to improper or illegal contract details.

For more on the risks of selling your business without a business broker, or to learn about any of our business brokerage services, speak to the staff at Utah Business Consultants today.

When it comes to business sales, there isn’t a whole lot of secrecy involved between parties. Due diligence and disclosures are a vital part of this process, with both prospective buyers and sellers sharing several areas of information – including a basic understanding of what the opposing party is looking for, which will help make better decisions toward your goals.

At Utah Business Consultants, we’re here to help on both sides of this coin. We’ve assisted numerous individuals and entities with both buying and selling a business in Salt Lake City, and a key part of this process involves understanding the general desires of buyers and the key areas they’ll look in. Whether you’re a prospective buyer considering businesses or a seller looking to get in-tune with what your potential buyers will be looking for, here’s a broad checklist of some of the most important areas for business buyers as they scour the market.

SLC business buyer checklistMargins and Financial Health

First and foremost, buyers will naturally be interested in the pertinent financial details of any business they’re considering acquiring. Understanding the ins and outs that determine whether the business is profitable, or even whether it can be in the future with the right tweaks, is vital.

Some of the areas that may come up here include:

Management and Ownership

Another important factor for a business buyer will be evaluating the management and ownership structure of the current business. Has management been consistent across recent years, for instance, or has there been significant turnover? Will the seller of the business continue in any kind of ownership or management capacity? These and several related questions will all come up.

Marketing Themes

Marketing is also very important for many businesses. Is the company producing new products or services, or planning to in the near future? What about the business market share and how it compares to the competition in the industry? Plan for significant conversation to arise in this area.

Inventory and Manufacturing

Finally, if the business is one that manufactures products, what is the current inventory level? Is inventory turnover higher than the buyer might like, or is the company working with too large a range of suppliers? These and other questions related to inventory and the products created will often be paramount to a sale going through.

For more on the kinds of items buyers are generally looking at for a business sale, or to learn about any of our business brokerage services in Salt Lake City, speak to the staff at Utah Business Consultants today.

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