Preparing Small Businesses For Sale In Santa Clara County, CA

Selling a small business in Santa Clara County, CA or elsewhere across the state is very different than selling a home. The differences between the two types of sales are actually very significant, and failing to understand why there are different requirements can end up costing you in the sale.

Ideally, hiring a business broker is essential for any type of small businesses for sale. These professionals are much more than just commercial real estate professionals; they have the network of potential clients, the ability to market effectively to qualified buyers, and a very clear understanding of not just the market for your business, but also the specific industry.

There are several important steps that the business brokers will also recommend to assist in preparing small businesses for sale. These steps will provide the owner with clear information on the business, help to determine a fair market value, and also to have the information on hand required to provide qualified and interested buyers.

Valuation

All small businesses for sale should have a valuation completed by an experienced business broker. This will provide an objective value for the business, which then allows the owner to work with the broker to develop a fair market price.

Fair market price is important as a business that is overpriced for the market and the industry comparable sales is not going to move. On the other hand, pricing the business too low is going to result in a lower than expected selling price and the seller leaving money on the table.

There are different methods to completing a business valuation. Ask about the method used and make sure it is not just a number based on percentage of income.

Contracts and Employees

With some small businesses for sale, formalizing working agreements with customers and vendors can be very helpful to making a sale. Your business broker in Santa Clara Country, CA may recommend this step to provide a level of security for the buyer. With both vendors and applicable customers with contracts, the buyer has more confidence in taking over the business.

The same is also true with employees, particularly the management or supervisory level staff. When they are committed to stay with the company for the first few months after the sale, the new owner has time to train replacement staff without any disruption in services or product.

The business broker may suggest other modifications to the business as well. These often are very low-cost or no-cost options that simply add to the stability and viability of the company over the long term, making it more attractive for buyers.

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