When it comes to gurus about selling or buying a business, they don’t come better than Andy Cagnetta. His Transworld Business Advisors is the No. 1 business brokerage and international franchisor. Transworld has more than 900 business brokers and 5,000 businesses for sale.
Andy shared five top tips for selling your business in an interview with Kevin Gale, Group Editor-in-Chief, Lifestyle Media Group, parent of SFBW. Cagnetta previously conducted a webinar with SFBW.
- Commit to selling your business and realize selling is not an easy process. If a seller can’t tell a potential buyer what they are doing next, they may be afraid you will get cold feet. Also, be ready to compromise.
- Determine how much your business is worth. Businesses are valued based on what the buyer is going to make. Ensure earnings are increasing—don’t start winding things down because you want to retire. Have solid financial records and technology systems.
- Make sure the business is transferable. If you are chief cook and bottle washer, that’s not good. Neither is having four family members who are all leaving. Have a properly trained staff and a systemized and documented business—enough that it’s turnkey.
- Watch for deal killers: You have one customer that is 80 percent of your business. You have an unresolved environmental issue, an unsettled lawsuit or an unsatisfied SBA loan. You forgot to file UCC paperwork with the state to show equipment loans were paid off. Get rid of old equipment and obsolete inventory. Clear out antiques and collectibles not included in the sale. In short: Stage your business for sale.
- Make sure corporation records and state filings are accurate. Some sellers may not realize filings still list former owners or past partners.
View the SFBW webinar with Andy Cagnetta here.
