Understanding Buying and Selling a Business from the Other Side of the Table

When it comes to the process of buying and selling a business, there’s the sellers side and the buyers side of the deal. Because selling a business can be a lengthy process, it’s helpful for buyers and sellers to be knowledgeable about each other’s perspectives.

Many sellers are too removed from the risk they took when first starting or buying their own business. Many buyers fail to recognize that there are legitimate reasons an owner might be selling that don’t always include a struggling or failing business.

Statistics show that only about one out of 15 would-be business buyers will actually buy a business. This is probably for good reason. Buying a business can be a large financial risk for potential buyers and can often include leaving a stable job for the more uncertain waters of business ownership. From the buyer’s perspective, there are many factors that go into the decision to purchase a business. There is the need to research the company for sale. This includes reviewing financial statements and tax returns for the past 3 years to determine if the business is growing, declining, or maintaining. Business ownership, aside from being financially risky, can also be very time consuming in the beginning. Buyers will need time to sort through the pros and cons of the possible transaction.

From the seller’s perspective, there are a variety of reasons to sell a business. Retirement is the obvious one, but sellers may also consider selling because they are burned out on running a business. Buyers often struggle to accept this reason for a sale, but even a business that is successful and growing can result in an owner experiencing burnout. Smart business owners know that their personal health and the health of their business are connected so knowing when it’s time to move on is a smart move for them and the business. Besides burnout, business owners may decide to pursue other adventures, relocate, or want to sell and start or purchase a new business.

Understanding what motivates buyers and sellers can help foster the right deals. Owning a business is not for everyone. A reliable and honest business broker can help sellers determine the right time to exit and a buyer choose the right time to buy. At Regal Consulting Corp., our professional team of business brokers has years of experience helping clients sell businesses in New Jersey, Pennsylvania, New York, and Connecticut. Our expertise, integrity, and marketing tools ensure we price your business appropriately, identify a qualified buyer, and close the deal. Call us today and we can begin with a thorough business valuation and exit plan.