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Paul – FS Concierge
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Hi Dr. Daniel,

I was approached to sell my business and the sale fell through at the 11th hour.

Getting your business valued is very important in the process just like a house – unrealistic valuations = no sale.

There are big differences with business sales however with just some of them being:

If the business relies on you as an individual, it will be much harder to value and sell than if anybody could run it.

It is important to have your books in order and be able to prove financials – some people try to paint a glossy picture by not buying new stock or maintaining P& E in the lead up to a sale and there are a million other tricks. But my view is to try to present the business in an honest as possible way but without making any major purchases or investments right now.

Try to be helpful around any opportunities in the market that you have seen that you have not pursued for your own reasons. A business with good growth prospects is worth more than a business that is going backwards. For the same reason, you will sell for more $$$ when revenue is at its nadir than when it is already starting to slip.

It is your baby but try to take a very dispassionate view of the sale – essentially, people are buying an asset that they need to work for them in their life, – it is helpful to keep this in mind.

Business brokers often have a lot of very useful advice on their websites so it is worth starting some research. Their fees are typically in the 8-10% range + marketing costs and can be negotiated – they will ask for the marketing costs up front.

I hope some of this helps as a start.

Cheers