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1. Never
post the business name or address... |
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Not only will buyers then disrupt your
day to day activity BUT word will spread
fast that you are selling and by the community
knowing that you are selling you will lose
customers/clients, employees and your
competition will run with it.
FACT
- a business for sale on the public
market has a shelf life of 6 months before sales
run dry! |
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2. Never
post your full name or home/business phone
number... |
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Not only do you not want buyer calls coming to your
business (see last above) nor coming to
your home 24/7 BUT once again by posting your
full name you are, in essence, publicly putting
your business for sale. Word will spread and
adversely affect your business.
FACT
- business buyers are unlikely to buy a
business for sale on the public market because
they know that said business is already
suffering from the customer and employee siege -
and the competition's marketing strategy. |
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3. Never
use the term " Best Offer" - sometimes
written as BO (not body odor)... |
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All you are going to get at this point
are bottom feeding slugs offering
pennies on the dollar OR offers for
barter instead of cash. The majority of
"Best Offer" buyers don't even have what
they are offering and most will renege.
That's right just because someone gives you an
offer does not mean you sold your business.
FACT
- more than 80% of offers taken by by
business owners selling on their own do not
close and/or end up in court because of the lack
of knowledge in this arena. |
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4. Have a concrete price on your
business and stick to it... |
| Unless you are
bartering or using "best offer" referred
to above then you need to have a
concrete price on your business and
stick to it. Even if a business has no
profit or cash flow it may and will have
some value because of the assets and
possibly goodwill. By "stick to it" we
do not mean all or nothing rather
negotiate with a provable figure.
FACT
- business owners with a professional
valuation on average find their business
worth twice as much as they would have
valued it. |
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5. Never show a buyer your financials
without securing confidentiality... |
| The amount of
business owners willing to share their
business financials without protection
is MIND BOGGLING. Your tax returns are
confidential in nature and can be
devastating to you if made public or if
falling into the hands of a criminal.
You might as well just post your social
security number in the newspaper.
FACT
- unless you are only selling your hard
assets, a business buyer will require a
review of your tax returns and other
business related material. And this
buyer should ALWAYS be qualified then
secured under a series of
confidentiality docs. . |
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NOW let's delve into the CL ad itself
and the proper way to post your business
for sale... |
| First thing is DO NOT
post the asking price or gross sales
rather ONLY refer to the business cash
flow / profit as this is what a buyer
wants to see. You can provide the asking
price and gross sales in your follow up.
MAKE THE BUYER reach out to you and too
much financial information will only
discourage them.
Next stay away from
real estate terms like "priced to sell"
or "just reduced" as
these terms were designed for
residential home sales and NOT a
business sale. Residential home buyers
want the best deal on a home while
business buyers want to make money on a
business. Devalue your business in the
ad and expect the bottom feeders to
rise.
Last before designing
the ad think about what you would want
to read if you were a buyer. We have
seen thousands on CL ads posted that
easily unsold or scared away a buyer.
Below are two ads for the same business.
The ad on the left is a REAL posting
from CL - and YES it was posted exactly
as shown - the ad on the right is how we
would clean it up.
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The real posting
on Craigslist - "
Sports Bar 4 Sale" |
Our way to clean it up - "
Established Sports Bar " |
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Ya wanna get in
the bar biz then we have the
joint! Place does ten thou a
month in sales and regular
alchi's make up primary biz. IM
moving and already have BO and
want more offors before
deciding. Only serious and if no
offor with reply then kiss my
(bleep). I aint in this to play
games - I gotta move! |
This is a GREAT
turnkey sports bar for someone
interested in getting into the
bar business. We have an
established location with a
loyal and regular customer base.
Owner relocating and currently
considering reasonable offers.
Reply to this ad with a first
name and number so we can call
and disclose more. |
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| The #1 mistake we see
in CL postings is the grammar and
language. The above ad may be causing a
chuckle but go ahead and search
businesses for sale on CL - the above
type of ad is much more common than you
might think. |
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SO what does a
business buyer look AND ask for when
replying to a CL posting? |
| The very first thing
a business buyer wants to know is how
much money can he or she make with the
business. Commonly referred to as "cash
flow" or "true profit" the buyers wants
to see how much they can make either
monthly or annually. More than 90% of
business owners do not know how to
accurately calculate cash flow and end
up giving away the business for a
fraction of what they could have gotten
for it - and gotten for it in the same
time frame is the cheap sale. NEWS FLASH
- the cash flow reflected by
"QuickBooks" and the like is not the
same as the actual cash flow or true
profit - NOT EVEN CLOSE.
Believe it or not - a
business buyer will pay substantially
higher for a business with a proven cash
flow by Business
Market Valuation rather than a business
not prepared - or willing - to
demonstrate cash flow. The BELOW
business is REAL and listed with our
broker after we approached him and
demonstrated the following...
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Before us he was representing
business as... |
After our Business Market
Valuation... |
- 2010
Gross Sales - $250,000
- 2010
Expenses - $230,000
- 2010
(QuickBooks) Cash Flow -
$20,000
- Asking
Price with equipment -
$50,000
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- 2010
Net Profit (after
expenses) - $20,000
- 2010
Recasting Expenses added
back - $83,000
- 2010 Cash
Flow - $103,000
- Asking
Price with equipment -
$183,000
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| The above business
sold for $165,000 and while yes a
broker's fee of $16,500 came out of that
- the owner still made about $50,000
more than he would have had he continued
his own route on Craigslist. The moral
here is not to use a broker RATHER what
happens when you properly reflect cash
flow to a buyer - the above business
actually had a bottom line profit of
$103,000 NOT $20,000 AND WHY YOU MIGHT
ASK? There were $83,000 in expenses that
were added back into the profit for
legitimate reason. |
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We can help you
in many ways - allow our 10+ years
experience work for you... |
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