Facts About Selling a Business
Selling a business can be a very long and challenging process. Most business owners aren’t equipped to handle the demands and expectations of listing, negotiating, and closing a business sale. This is compounded even more when you consider the fact that the national average of businesses actually selling is around 30% according to a study cited in Forbes magazine (Hurn, 2021). That means that unless a business owner has a means of overcoming the law of averages that they will likely be unsuccessful in seeing their business sold.
The competition for business buyers’ attention is also fierce. According to BizBuySell, the largest online source for SMB listings, at any given time there are around 45,000 businesses listed for sale. Sellers have to find a way to differentiate their businesses in a way that gives their listing a competitive advantage. They have to know how to structure the listing in such a way that ensures they grab the attention of the buyers looking for what they are offering.
The good news is that there are many ways that a seller can structure the listing in order to distinguish their business from the many others with whom they will be competing. Some of these methods have been practiced by savvy business exit professionals for years. It just takes a little bit of big-picture thinking and creativity to ensure that when your listing goes live, it doesn’t get lost in the white noise of the market.
Will Your Business Sell?
One of the greatest differentiators for a business listing is seller financing. Many sellers who hear these words tend to wince and shy away from considering how this option can benefit them and ensure the future of their business. According to one study, only 10% of businesses priced at $500k or less were financed by the seller in any amount (Seller financing a business: How to strengthen your deal 2021). Buyers will quickly notice and pursue those listings in the 10% rather than the 90% because they offer a unique value proposition. Yes, there is some measure of risk involved with seller financing but those risks can be mitigated and sellers can take advantage of the opportunities that seller financing offers.
Another differentiator often overlooked by business sellers is getting the listing pre-qualified with an SBA lender. SBA-approved lenders are a great source of information and expertise for deal funding. They can work with sellers to let them know if their business can support the debt load of a business loan. They can also help sellers know what type of buyers to consider with respect to their cash position. Buyers also love to see when a business is SBA pre-qualified. They know that if the business has been scrutinized by an SBA-approved lender that it must have some core strengths that make it a viable investment that is worthy of their attention.
Finally, one of the most important differentiators for business listings is price. It cannot be stated enough that motivated sellers who are willing to align their list price with the market will beat the odds and find a buyer. Numerous studies have been conducted to determine the success rate of business listings and almost every single study cites unrealistic price expectations as the greatest contributing factor to a business not selling (Nead, 2020). If you can’t afford to sell for the price that the market is telling you, you will have a slow or completely unproductive listing. There is no need to waste the time trying to force the market to accept your price. The market is powerful and almost always wins.
Let The Market Be Your Ally
If you find yourself in a position to want to sell your business, be sure and consider the implications of what the process entails. Once you have made the decision to sell, go all out, don’t be half-hearted. Buyers can easily sense sellers who are committed to the sales process. More importantly, the market itself will not reward you with good, qualified buyers in the first place if you haven’t positioned your business to sell. Once you make the commitment, however, and follow the steps to differentiate your business, you will find that good buyers are out there and eager to find you.
Wise sellers find a way to make an ally of the market instead of trying to beat or fight against it. If you can condition your expectations as a seller to the purpose and power of the market, then you will find that the market can be a powerful tool for helping you to accomplish your business exit goals. With this understanding, you will be well on your way to coming out on top and finding the kind of business exit that sets you up to fully enjoy the next phase of your life.
Works Cited
Hurn, C. (2021, November 10). ‘Silver Tsunami’ Means More Business Acquisition Opportunities. Forbes. Retrieved February 25, 2022, from
Seller financing a business: How to strengthen your deal. Financial Poise. (2021, November 14). Retrieved April 4, 2022, from https://www.financialpoise.com/seller-financing-a-business/
Nead, N. (2020, November 3). Only 30 to 40% of businesses actually ever sell. InvestmentBank.com. Retrieved April 4, 2022, from https://investmentbank.com/only-30-to-40-of-businesses-actually-ever-sell/
