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Ready to sell your business? Make sure it has value

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I recently gave a talk to a commercial real estate association. They asked me to talk about how they could sell more listed businesses. During the presentation, I asked them what percentage of businesses that are listed are actually sold. The response was “very few.” I wasn’t surprised.

Not only is it hard to sell your business, it’s harder to get a good price. The reason is that most business owners don’t actually understand what makes a valuable business. They think a business is valuable if it’s making money. That’s not correct.

The truth is that most business owners aren’t selling a business, they’re selling a job. In order for a business to be valuable, the buyer must see the value. So how do we enable them to see the value?

Buyers want a number of things:

The reason businesses are hard to sell is usually a combination of the challenges listed above. Ensuring that a business is ready to sell takes years. Once you understand clearly what buyers are looking for, you can set yourself apart from those sellers who have just put their business on the market. Creating value in the minds of buyers takes preparation and often several years of groundwork.

Fifty-five per cent of businesses are going to transition to new owners or close in the next decade. Closing is a poor option if you have something valuable. Commercial real estate agents would love to help you sell your business but you must prepare to sell long before you list.

Troy Media columnist David Fuller, MBA, is a certified professional business coach and author who helps business leaders ensure that their companies are successful. David is author of the book Profit Yourself Healthy

The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.

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