SAN JOSE, Calif. — The California economy may be struggling, but that doesn’t mean it’s impossible to sell a business. Members of the California Association of Business Brokers (CABB) are seeing a strong future for business sales within the state.
“As baby boomers look to retirement, a large number of businesses will continue to change hands,” said Ron Hottes, president of CABB and president of Business Team LA and Business Team SoCal. “Before that retirement can happen, the owner has to put their business on the market – a task that shouldn’t be taken lightly.”
During the next ten years, an estimated 65% of all small and medium-sized California businesses will be put up for sale. Less than a third of those businesses will actually sell. Why? “Often times an owner will think it’s easy to sell their own business so they don’t hire professionals to help with the sale,” explained Hottes. That could be a mistake. It’s no different than using a tax professional to do your corporate taxes as opposed to trying to do it yourself. Here’s why:
Nationwide, it typically takes 6-7 months to sell a business, but it can take up to a year. Maintaining current operations is crucial during a sale. Using a business broker allows the owner to concentrate on the business when it matters most while taking away some of the stress and emotion that comes with the transaction.
A broker acts on the business owner’s behalf, allowing the sale to remain private. Business brokers use nonspecific descriptions and strict confidentiality agreements to ensure confidentiality throughout the sale.
Reaching qualified buyers
Potential buyers that are truly interested in the business can be hard to find. Business brokers have the contacts and resources to reach a large base of qualified buyers for the best sale price possible.
In order for a business to sell, it must be packaged properly and make economic sense to buyers. A business broker can provide proven, effective marketing materials, including a Business Profile and/or a Confidential Business Review.
Evaluation and Pricing
Potential buyers want to see a reasonable asking price when searching for a business. Brokers know how to evaluate and price a business, so it’s not guesswork.
Business brokers have experience in handling business sales in an efficient and professional manner. Their understanding of the current market and acquisition process is a crucial part of the sale.
“Selling a business is a major financial decision, often the biggest of someone’s life,” said Hottes. “It’s a mistake to go it alone. An experienced business broker can help you find the right buyer and obtain the best sale price possible.”
The California Association of Business Brokers (CABB) is a professional trade association dedicated to promoting the growth and professionalism of the business brokerage community within California. CABB is the largest organization of business brokerage and merger and acquisition specialists in the state, with more than 450 members. Founded in 1986, CABB was organized to recognize the professionals of business brokerage, to help educate the public on the benefits of using licensed intermediaries and to establish a code of ethics for all members.
[tags]California Association of Business Brokers, selling a business, CABB Ron Hottes[/tags]