Essay about Questions On Selling Your Business Series
The Price is Going Down...Not Up: Once you set your sale price, the final price you receive is likely to only be less. It 's not very often that a buyer will be so impressed with the value of your business that he or she will voluntarily offer to pay more for it than you 've asked; extremely rare, if ever! So once an interested buyer materializes and the path to the sales agreement begins, discoveries will be made or events will occur which will place a steady downward pressure on the value and price of your business.
Your prospective buyer will begin to know more and more about your business, its operations, employees, financial wellbeing, competitiveness...little by little, each of your secrets will begin to emerge and some of these may not be so favorable. Speed is of the essence because the longer the sale process takes, the more likely it is that events will start deflating the initial rosy picture of your business being in the peak of health: your key man might leave (subtract $100,000); a key customer defects (subtract $100,000); a lease is canceled (subtract $100,000); one of your facilities has a bad fire (subtract $100,000)...there is no end to the things that could go wrong, and even if things go right, the buyer won 't be offering you a higher price for your business.
The longer it takes to get to 'yes ', the more likely it is you 'll have a…