Niche Market Exit Planning Tips
Selling a Business Services Business
Selling a business services business doesn't happen overnight. It takes a deliberate process to get top dollar for your company.
Business buyers face their own set of frustrations and complications. Although there are plenty of entrepreneurs who want to buy a business services business, capital restrictions are holding them back.
However, serious buyers also understand the value of a good business services business. Financial statements and ROI are essential in converting modern business services business prospects into buyers.
Legal Considerations
It pays to invest in first-rate legal counsel when you sell a business services business. Competent legal counsel ensures that the sale documents are in proper order. Furthermore, a good lawyers provides the counsel necessary to navigate the tax and liability issues that surround a business sale. We recommend hiring an attorney early in the process to gain insights about the legal consequences of various sale outcomes.
Selling a Business Services Business to an Employee
There are both benefits and drawbacks to selling a business services business to an employee. A faithful employee may have the motivation and ability to continue to operate the business. If you need to sell quickly, the timeframe is condensed in an employee sale because you don't need to track down a buyer. Yet most employees lack the means to buy their employer's business at or near the asking price. A seller-financed deal may be necessary unless the employee has significant assets or investor backing.
Average Preparation Time
There are no effective shortcuts for selling a business services business. Since buyers prefer to see evidence of future cash flow, you'll want to to strategically lock in cash flows and increase profits before you list the business. Next, the business will need to be documented in professional financial statements and manuals that facilitate the ownership transition. Since all of this takes time and effort, a business services business can rarely be ready for the marketplace in less than six months. If you can afford to wait, we recommend investing a few years in improving your business's financial position before you put it on the market.
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