Empire Business Solutions, a leading independent Business Broker in Los Angles County and has been involved in business for sale in Orange County for over 15 years with over 85 transaction under our belt. Roy Moss, President of Empire, says “Selling a business is one of the most misunderstood and poorly managed processes in small business today. This is unfortunate too, because a lot of high-energy, risk-taking entrepreneurs have spent years bare-knuckle brawling with lenders, suppliers, employees, competitors and governments to provide for families, create wealth and provide jobs and service to their communities and one might think exiting for other opportunities or the golden years would be rewarding.”
To have the advantage, or at least an opportunity to get to the closing table, you must see the business through the eyes of a buyer and lender, so you’re prepared for the incoming fire that will inevitably come your way. Buyers and sellers are at cross-purposes when it comes to terms and conditions of a sale so knowing how to proceed once the swords are crossed is critical. What is positive for the seller is usually negative for the buyer and vice-versa. When a buyer tells a seller, the business is not worth as much as (s) he thought, it’s often viewed as a personal attack and the response can create a barrier to (what still could be) a successful transaction.”
Unfortunately, about 25% of the businesses never get sold. Deals go south…a lot. Here are some of the more common reasons we see (outside of the obvious overpriced business):
Poor financial records; they have to instill confidence.
Lack of transparency; be open and honest.
Lack of Seller financing.
Your business requires too much working capital.
Excluding assets that are used in the business.
Business is too dependent on the owner, a customer, an employee or supplier.
Landlords; make sure your lease is transferrable to a Buyer.
Employees won’t stay after the sale.
Non-compete issues.
Revenue starts to decline during the sale process.
No recurring revenue.
You are in a commoditized business, nothing differentiates you.
Professional advisors; most people think attorneys kill deals and while it does happen on occasion, it’s usually the accountant. Make sure you have a good deal team that specializes in Main Street transactions.
Lenders; the Buyer will need to have experience in the field being bought which is rare.
Empire Business Solutions with its knowledge and experience can help prevent these pitfalls to a successful deal. For more information on the Selling Your Business Process, go to https://empireoc.com/whitepaper
Contact Roy Moss, President of Empire Business Solutions at 714-374-6430 to discuss the process in selling or buying a business in Orange County. Empire has been in business since 2005 and is considered a leading California business broker with offices in Orange County and Los Angeles with primary emphasis on businesses in the $1.0 mil-$10.0 mil revenue range.