Selling Your Business: Limited Assets

Transworld Business Advisors

Selling Your Business: Limited Assets

There comes a time when any owner of a business, be it large or small, will want to sell. However, it should be made clear from the outset that just because you run a smaller business with limited assets that this disqualifies you from entering your business for sale into the market. You don’t have to be the owner of a Fortune 500 company for the sale of your business to be successful. There are buyers who are always in the market to start smaller with a limited asset company and are willing to start with less in order to grow. In this post, we will cover how you can successfully market your small business for sale.

As a business owner of a business with few assets, you know there are many advantages. You don’t have to worry about replacing outdated, broken or worn equipment, which can eat away at your profits and possibly shut down operation while waiting for repairs. This allows you to use your cash flow to fund your debt service, provide a good living wage, and fund all operating expenses.

Businesses that are for profit may be large or small, they must make a profit to stay in business, and they must have good financials that show proof of their profit. That would include profit and loss statements, balance sheets and tax returns for the past three years. A cash flow statement for those years should be included in the marketing packet prepared by the business broker. Financial institutions will loan to purchase businesses, but an ideal situation is a seller who will carry the note. Hopefully, you have a business plan to follow in the operation of your business. Whether you do or not, buyers purchasing a business are encouraged to prepare a business plan. A well-written business plan shows the seller and financial institution that a buyer is serious and prepared to operate a profitable business. A business plan is a guide to follow.

Be prepared to answer lots of good questions from the prospective buyer. A business broker will help buyers understand the business, but there will be questions for you. You want your buyer to enjoy the business and also make a good profit. If you started the business, built the customer base, and are very active in the business, your customers may think of you as the business. This is a positive thing, but a buyer will want precautions in place to protect the business after the sale. A non-compete agreement must be included in the closing documents. Included and very important is the area protected and the number of years you will not compete. This assures the buyer that you will not go down the street and start another business to compete with the one you are selling.

If you’re ready to sell your business, these steps are necessary, and will help you find a broker with years of experience to help execute your sale. A great way to begin this process will be to contact Moche Hazout at Transworld Business Advisors today!