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When it comes to selling your business, it all comes down to numbers.

Financials and Control

Sound financial numbers and control are critical to receiving full value for your business. Business buyers will pay more for a business with growing revenues, growing owner benefit and strong cash flow. And, it will be expected that your books are clean, and your revenues, expenses and add-backs are clearly documented and defensible. Anything less, buyers will see risk and this will drive the value of your business down in their eyes. To recap, important financial considerations in selling your business are:

• Clean up your financial history - document all revenues, expenses and add-backs. Minimize personal expenses put through the business.
• Tighten up your financial controls – sound budgeting and cash flow controls will give a business buyer confidence in any future projections.
• Establish metrics for management – buyers like to understand how you measure and react to changes in revenues, expenses and cash flow.
• Have a tax plan – work with your CPA to clearly define your tax minimization strategy and share this with a buyer.

Pricing

Advertising the right price for your business is critical for attracting business buyers. The surest sign of a business priced too high is a lack of interested buyers. At any given time, there are likely to be several similar businesses to yours for sale in your local area, not to mention the number of similar listings in your state and country. Most buyers are more interested in finding the right business vs. the right location. Some excellent questions to ask about pricing your business are:

• What similar businesses in size and scope are listed for sale and where do you rank from a pricing perspective?
• What similar businesses in size and scope have sold recently and what did they sell for?
• What are the historical sales multiples of owner benefit and revenue for your business?
• Are their any special circumstances that may impact price, e.g., favorable lease agreement, new assets, etc.?

Buyers, Buyers, Buyers

Studies have shown on average 128 buyers will look at a business before it sells. It is very important your Naples business broker shares his personal marketing strategy for your business. What will he or she be doing to generate the volume of buyers needed to sell your business? Some excellent questions to ask your Naples business broker, and good answers are:

• What business broker associations do they belong to? Business Brokers of Florida, IBBA, ABBA, etc.
• How many business intermediaries are in their firm? Typically, the more the better.
• How many listings does their firm carry? You want a firm that carries at least 100 listings.
• What websites does the broker list their businesses on? BBF MLS, BizBuySell, BizQuest at a minimum.
• Who will they actively contact about your listing? Previous sellers, like business owners, competitors, high net worth individuals, PE groups, etc.
• How will they qualify buyers and maintain confidentiality? Non-disclosure agreement, financial verification, experience and obtain seller's approval prior to sharing the name and location of your business.

For additional information regarding Florida business sales, acquisitions and valuations, please contact Eric J. Gall at eric@buysellflbiz.com or 239-738-6227. Also, visit our Florida Business Exchange website at http://www.fbxbrokers.com and my personal website at http://www.buysellflbiz.com.