Selling Your Business Online
Many business owners looking to sell their business don't realize they can use the internet to make the selling process go more smoothly. Online business-for-sale marketplaces allow sellers to reach a large number of potential buyers and provide resources for owners considering putting their business up for sale.
Mike Handelsman, general manager of San Francisco-based BizBuySell, the internet's largest business-for-sale marketplace, answers sellers' questions about listing a business for sale online.
Q:What should a seller do to prepare for listing a business for sale online?
A: Allowing yourself enough time is key. Too often, people try to rush their business to market and run into complications during the selling process as a result. Allow several months between making the decision to sell and making the business available online. During this time, figure out your company's financial situation so that you can present this information to prospective buyers.
Once you put the business up for sale, have all of the information relating to potential growth and revenue, past performance and business costs on hand. Putting the time and effort into preparing these figures in advance will tell potential buyers that you know what you're doing and give them more confidence in you.
Q:How can sellers determine a fair asking price for a particular business when using an online marketplace?
A: Online marketplaces often provide tools for determining a fair, standard selling price based on comparable businesses, geographic area, gross income and cash flow.
For example, if you're listing a restaurant, you could access a report that breaks down pricing information for that specific type of business and its location. A full-service restaurant might be priced at 33 percent of annual sales, as opposed to 40 to 50 percent for a fast food restaurant. More specifically, a fast food restaurant specializing in hamburgers might sell for 35 percent of annual sales, while a pizza restaurant would generally sell for around 30 percent.
Also, our data indicate that restaurants typically sell for an average of 85 percent of sellers' original asking prices. So if you're a restaurant owner wanting to sell your business for $200,000, you may want to ask for $235,000.
Q:Are certain types of businesses easier to sell online than others?
A: Our data from 2006 show that the largest category--nearly 15 percent--of business listings were restaurants, so those are the type most frequently purchased. Another popular category is service establishments, including auto repair shops and dry cleaners.
However, people have listed and sold a variety of businesses, from web design firms to furniture manufacturers.
BizBuySell is the Internet's largest business for sale marketplace. Since 1996, BizBuySell has offered tools that make it easy for business owners and brokers to sell a business, and potential buyers to find the business of their dreams. BizBuySell currently has an inventory of approximately businesses - spanning 80 countries - for sale at any one time and receives more than monthly visits. The site also features an extensive franchise directory as well as an easy-to-use business valuation tool. Please visit www.bizbuysell.com for more information.
BizBuySell was founded in 1996 and in 2012 became a division of CoStar Group, Inc. (NASDAQ - CSGP) - commercial real estate's leading provider of information and analytic services. CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information and offers a suite of online services enabling clients to analyze, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities. For more information, visit www.costar.com.
Walker Sands Communications
office: (312) 546-4712