Selling or buying a profitable business can be a tough process. We know that less than 2% of all buyers buy and less than 30% of small business owners successfully sell.
It is for those reasons and a few more that the process to buy or sell is delicate and occasionally difficult. Although it would be impossible to list all the potential road blocks in one blog post, I'll try and illuminate 3 things you should know if you're interested in selling a profitable Texas business.
Seller's of profitable small businesses should know:
1. The due diligence process can be grueling.
I am currently working with some Sellers that are very private people. And while I respect their desire for privacy, I also want them to know that a buyer's due diligence may bump up against their value of privacy making the process a challenge for them.
For example, during due diligence a Buyer Prospect may want to know what they plan to do after they sell the business. Will they retire and enjoy time with their family or do they plan to open a competing business up the road?
A Buyer Prospect WILL ask for financials and WILL make judgements about you and your business based on that data. Put yourself in the buyer's shoes, imagine the questions they might ask, and spend some time in advance thinking about the story your financials tell.
2. It's VERY DIFFICULT to sell a business that shows declining revenues.
Business ownership is tough, y'all. So tough that most small businesses don't survive and many don't thrive. Whenever possible, aim to sell your business when revenues are trending up. If you decide to sell your business after you're maxed out and revenues are declining, you won't get the maximum value for your business if you get anything at all.
Declining revenues can suggest to a buyer that your business is experiencing troubles and that uncertainty can prevent a new owner from being exciting or willing to take on the risk.