How Do I Sell My Business Privately

How Do I Sell My Business Privately

Are you thinking about selling your business, but don’t want to involve a broker or pay hefty commissions? Selling your business privately may be the way to go. While selling a business privately may require more effort and time, it can also save you thousands of dollars in commission fees.

In this guide, we will provide a step-by-step process on how to sell your business privately. We will also discuss the benefits and challenges of selling a business privately, and how a trusted business advisor like HedgeStone can assist you throughout the process.

Benefits and Challenges of Selling a Business Privately

Selling a business privately has both advantages and challenges. Understanding these can help you make an informed decision about whether selling your business privately is right for you.

Benefits of Selling a Business Privately

  1. Save on Commissions: When selling a business through a broker, you typically pay a commission of 5-10% of the sale price. By selling your business privately, you can save thousands of dollars in commission fees.
  2. Maintain Control: When selling a business through a broker, you may have less control over the sale process, including how and when your business is marketed. Selling your business privately allows you to maintain control over the entire process.
  3. Privacy: Selling a business privately can help maintain the confidentiality of the sale, which may be important for various reasons, including avoiding negative effects on the business’s operations or employees.

Challenges of Selling a Business Privately

  1. Time and Effort: Selling a business privately requires more time and effort than selling through a broker. You will need to handle marketing, screening buyers, negotiating the sale, and completing legal paperwork.
  2. Limited Network: Brokers have an extensive network of potential buyers, while selling privately may limit your pool of potential buyers.
  3. Risk of Underpricing: Without the expertise of a broker, you may risk underpricing your business, leaving money on the table.

How to Sell Your Business Privately

Selling your business privately involves several steps, including valuation, marketing, screening buyers, negotiating the sale, and completing legal paperwork. Here’s a step-by-step guide on how to sell your business privately.

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Step 1: Valuation

Valuing your business is an essential step in selling your business privately. A business valuation will help you determine a realistic asking price and avoid underpricing your business.

There are several ways to value your business, including asset-based valuation, earnings-based valuation, and market-based valuation. An experienced business advisor like HedgeStone can assist you in valuing your business and determining a fair asking price.

Step 2: Marketing

Marketing your business effectively is crucial to finding potential buyers. There are several ways to market your business, including:

  1. Online Platforms: List your business for sale on online platforms like BizBuySell, BusinessBroker.net, or Craigslist.
  2. Social Media: Utilize social media platforms like LinkedIn and Facebook to advertise your business sale.
  3. Referrals: Reach out to your network of business contacts and industry peers to see if they know anyone interested in purchasing your business.
  4. Business for Sale Sign: Place a “Business for Sale” sign on your business’s physical location to attract local buyers.

Step 3: Screening Buyers

Screening potential buyers is essential to ensure that only serious and qualified buyers are considered. Some steps in screening buyers include:

  1. Requesting Buyer Information: Request a letter of intent, proof of funds, and financial statements to ensure that the buyer has the financial capability to purchase your business.
  2. Non-Disclosure Agreement: Have potential buyers sign a non-disclosure agreement to protect the confidentiality of the sale.
  3. Qualifying Buyer’s Intentions: During this stage, it is crucial to ask potential buyers about their motivations for buying a business, their experience, and their plans for the future of the business.

Step 4: Negotiating the Sale

Negotiating the sale is a critical step in selling your business privately. You should prepare yourself for the negotiation process and be ready to negotiate on the following terms:

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  1. Price: Be prepared to negotiate on the price of your business, considering factors such as market demand, competition, and business performance.
  2. Payment Terms: Consider payment terms, such as down payment, financing, and payment schedule.
  3. Transition Period: Consider the length of the transition period, during which you will assist the new owner in the business’s handover.

Step 5: Completing Legal Paperwork

Completing legal paperwork is the final step in selling your business privately. The legal paperwork includes drafting and signing a purchase agreement, transfer of ownership documents, and other necessary legal documents.

It is essential to seek the assistance of an experienced business advisor and a lawyer to ensure that all legal paperwork is accurate, complete, and legally binding.

How HedgeStone Can Help You Sell Your Business Privately

HedgeStone Business Advisors is a trusted team of professional business brokers, in-house attorneys, accountants, and marketers with over 150 combined years of business sales experience. Their expertise lies in representing buyers and assisting with every aspect of the purchasing process, from due diligence to negotiating the best deal.

HedgeStone’s dedicated professionals can help you sell your business quickly and for top dollar. Here’s how HedgeStone can help:

  1. Valuation: HedgeStone’s expertise in business valuation can help you determine a fair asking price for your business, ensuring that you don’t leave any money on the table.
  2. Marketing: HedgeStone’s comprehensive approach to marketing can help you reach a broader pool of potential buyers, including leveraging their extensive network of qualified buyers.
  3. Screening Buyers: HedgeStone understands the challenges of screening potential buyers and can help you identify serious and qualified buyers.
  4. Negotiating the Sale: HedgeStone’s wealth of experience in negotiating business sales can help you negotiate the best price and terms for your business.
  5. Completing Legal Paperwork: HedgeStone’s in-house attorneys can assist you in completing all legal paperwork accurately, completely, and legally binding.

Conclusion

Selling a business privately can be a complex and challenging process, but it doesn’t have to be. With the right guidance and support, you can sell your business quickly and for top dollar. In this guide, we’ve outlined a step-by-step process for selling your business privately, from determining its value to negotiating the sale. We’ve also discussed how HedgeStone Business Advisors can help you every step of the way, providing you with the expertise, value, and service you need to achieve your goals.

If you’re considering selling your business, don’t hesitate to reach out to HedgeStone for a free consultation. Our team of dedicated professionals has the experience and knowledge to help you achieve a successful outcome, whether you’re selling a small, main street business or a multi-billion dollar international brand.

Call us today at (561) 593-3711 to learn more about how we can help you sell your business privately.

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