Business Owners Making $100,000-$400,000 – We Have Buyers
The Phoenix metropolitan area has had one of the fastest growing economies in the United States for the past 10 years. The value of goods and services produced in the Phoenix metro area was $187.4 billion in 2008, and its economy has continued to grow steadily since. The outlook is particularly bright for prosperous small businesses with owners earning between $100,000 and $400,000 per year. Business owners in Phoenix will need to consider the following factors to make the sale of their business a smooth, profitable experience:
- Seller’s Remorse
Establishing the asking price on a business is more complex than appraising the value of a house because many more factors are involved. Setting the price too high scares off buyers and causes the business to remain on listings until it gets stale. On the other hand, setting the price too low means you leave money on the table. LINK Business Phoenix brokers have experience preparing an opinion of value for the business owner.
It’s also important to be carefully consider advice from outsider advisers such as accountants, lawyers and relatives who are not actively involved in buying and selling businesses in Phoenix. They may mean well, but rarely are able to accurately estimate the value of your business.
Accurate bookkeeping may not always occur while operating a business, but it’s essential for selling one. Virtually all prospective buyers will want to look over the books before they will make an offer. Many buyers will need to take out a loan, and banks will also need to see the books before approving the loan. Furthermore, a red flag may go up with the IRS when a business’s tax returns don’t match up with its profit and loss statements. A business broker will also need to review these records to estimate a business’s current value.
Choosing the right time to sell a business is critical to obtaining the best price. Ideally, both the economy and the business itself will be doing well when an owner decides to sell. In practice, however, owners often wait until sales and profits begin to decline before deciding they want out. This situation can dramatically reduce the sale price.
Another scenario to avoid is attempting to sell a new business that hasn’t started to make a profit yet. These owners often feel their business has great potential, but buyers will be more interested in a proven business that’s already making money. Additionally, banks generally require a business to have been operating for at least three years before they will approve a loan. They will also require the business to be making enough of a profit to service the loan and pay the new owner a reasonable salary.
Seller’s remorse is common with small businesses that have a sole owner whose identity is intertwined with their business. The roller coaster process and other uncertainties can make owners question their decision to sell. The key to dealing with this challenge is to ensure that this is what you want to do and remind yourself of all the reasons why you want to sell. It’s also important to avoid getting emotionally involved when a buyer tries to get you to sell at a lower price. Bear in mind that buyers pay what the value of the business is worth to them.
Business owners have a lot to deal with when trying to sell a business. These challenges include negotiating the best price while preventing employees, clients/customers, and suppliers from finding out about a possible sale. An experienced LINK Business-Phoenix broker can handle many of these issues, allowing an owner to focus on running the business until it’s sold.
The brokers at LINK Business Phoenix are ready to help. Contact LINK Business Phoenix at (480) 686-8062 by phone or email at email@example.com to get in touch with a professional business broker.