How to Close a Business Sale
Whether your selling a $60 handbag or a million dollar business, it all depends on your ability to relate with the customer and your confidence in the product. Here are some important tips to help you in closing that business deal.
4 Tips that will help you close a Business Deal
1. Believe in the business for sale
If you are not passionate about the business you are selling, then potential buyers will see it. You need to have a thorough understanding of why you are selling the business and what are its most profitable traits. Get a notepad and write down all the positives and negatives of the business. Develop a "slogan" of what best describes your business "great location, heavy foot traffic with a reputable name and great products" this will help you have confidence when selling the business. If you are aware of all the positive and negatives before going into the sale process, you will feel prepared to answer any questions the potential buyer may have.
2. Reduce Emotional Attachment
Some business sales professionals, will say to remove all emotional attachment. But when advertising a business for sale privately, the potential buyer will want to hear about your experiences running the business, so becoming emotionally detached is difficult. For instance, If you have run the business for 15 years and are now selling due to retirement, id suggest to mention what you enjoyed about running the business all those years, what sort of lifestyle it provided you, what were some of the obstacles you overcame, did it win any awards, where would you like to see the business go. It all depends on the business you are selling and how long you have operated it.
It is important to express how the business has operated and what it has meant to you. But dont get carried away with focusing on the money, how much time you have invested in selling it, all the improvements you have made or lack of enquiries. Basically, dont complain to the potential buyer. You need to appear as though you are ready to move on and sell the business. That the business has served you well, but its time to sell. Dont appear desperate as it will seem like you want a quick sale and that there is something 'wrong' with the business. You need to appear confident with the business you are selling.
3. Focus on the buyer
When selling a business you have invested a lot of time and work in, it can be hard taking a step back and moving on. Its important when speaking with potential buyers that you evaluate 'their needs' as you are trying to find the 'best fit' for your business. Not only does the buyer have to give you money, but you also need to accept it. By focusing on the buyer it makes you appear less desperate. That you are "interviewing" for the next owner, rather than accepting anyone who walks through the door.
Ask the potential buyer questions like "what sort of business are they looking to run", "will there family be involved in running the business", "do they like the area the business is in". Without being too direct, these will help you relate to the potential buyer and understand their circumstances.
4. Negotiating the price
When setting the price to sell your business, understand that negiotiations will usually take place. Have flexibility in your price to make adjustments. Presenting the potential buyers with a sellers memo will help you be upfront about the price and the inclusions. Be confident in your valuation, price is not the only asset to leverage, you could reduce the SAV before the sale, give the buyer a transitional or trial period, offer ongoing training and support, provide meetings with business connections, and so on. Understand everything that is included in the sale (not just tangible assets).
Remember, the business is not sold until the money is in the bank! If you are not confident with closing the business sale, enlist the help of a friend, business broker, accountant or lawyer. Use your 'business for sale team'!
Was this article helpful in closing the business sale? Have you sold a business privately? How did you find the process of negotiations?