Mistakes to avoid in selling your business

From Greg Gottsacker

She could also try to sell it herself if she doesn't like the Sunbelt process. Exit Strategy Software is designed for business owners who want to improve their business performance and profitability, plan their exit strategy or sell their business by themselves. The software was designed by an industry professional who is formally educated in the process. Their website address is: http://www.exitstrategy.biz

From William Bruce, Fairhope, AL.

For a free booklet from the American Business Brokers Association entitled "Selling Your Business While Avoiding Costly Mistakes," please email William Bruce, president of the American Business Brokers Association at WilliamBruce@bellsouth.net. Or visit the association website at http://www.AmericanBusinessBrokers.org.

From Paul South Florida

List it for sale on http://www.sellmyinventory.com

From Lou Vescio, CBI,M&AMI, Melbourne, FL

Having priced many gas stations and convenience stores, my first question is "Does the business have good financial records and tax returns?" Most businesses of this type do not and are very difficult to sell. If a gas station has good tax returns, it is possible that it would qualify for an SBA loan and the chances of finding a good buyers are much higher. If it will not qualify for an SBA loan, is the seller willing to hold a note for a buyer. If not, it may never sell, because most buyers want to finance a business! Also, many gas stations listed for sale are over priced and therefore never sell!

Here are some dirty little facts about businesses for sale. Less than one in five listed businesses sell. The main reasons are no accurate financial records, the business is losing money or not making enough money, or is over priced. The average small business (less than $2M) sells for a 2.5 times EBITDA or a 40% ROI. If a business qualifies for an SBA loan, it will typically sell in the 2.5 to 5 times EBITDA range, depending on risk, with well known franchises (McDonalds, Taco Bell, etc.) selling at the higher levels. Why is this so, RISK! If a bank will loan the money on a small business, they have determined the risk is lower, and less than 10% of all businesses on the market will qualify for an SBA Loan.

As for finding a good broker, ask if he/she is a Certified Business Intermediary (CBI). If not, find a new broker! Broker knowledge and training is everything in this business!