When your business doesn’t have many assets, it’s difficult to know what you have to sell. But, a business is a lot more than four walls and a workforce.
In reality, when you’re selling your business, you’re advertising its cash flow. That’s what determines the value of your company and that’s what will bring in the buyers.
The assets that you pass on are just a means of creating the cash flow. The only time that changes is when your business’ cash flow isn’t large enough to justify your asking price. At that point, the market value of your assets is the price you set.
Since you’re a business owner with few assets, you don’t have to worry about what your equipment is worth and what you may need to replace. Instead, you can focus on maximizing your profits. But, when it becomes time to sell, you’ll need to put a little bit of extra focus on how you present your business so that its value translates to buyers.
1. Be Prepared for Lots of Questions
The less physical presence your business has, the more curious buyers will be about how you run your company. They will need to know every detail if they want to be successful when they take over.
If you’re selling a business with few assets, be patient with buyers and allow them to ask any questions that are on their mind. And be ready, there’s sure to be more.
2. Put Together a Thorough Business Plan
Potential buyers will want to be able to clearly see how your business makes money. They will want to know everything from the costs, to the expenses, as well as ask for insider knowledge about how you manage your workforce and what your vision is for the company.
Make sure that you prepare a thorough business plan that allows a potential buyer to envision themselves at the helm of your company.
3. Use Non-Compete Agreements Liberally
Since you are primarily selling your cash flow and the ideas behind it, you need to make sure that you aren’t revealing any business secrets to the wrong people. You never know, they could pop up as a competitor rather than a purchaser.
Make sure that you ask potential buyers to sign confidentiality and non-compete agreements whenever necessary.
4. Offer to Train Your Buyer
As I mentioned, selling a business with few assets means that the buyer will have a little bit of a learning curve when they take over. This lack of knowledge is an obstacle you can help them overcome.
If you notice that a buyer is concerned about how they will continue to be successful in the structure you have created, offer to train them for a month or two to help them get the swing of things.
5. Be Cautious With Your Employees
When you have a business with few assets, your employees are a big part of the reason you have cash flow. The last thing you want is to upset the applecart and lose your workforce during a transition.
Make sure that you treat your employees with care and let them know about the decision to sell the business at the right time.
6. Take Your Time
If you don’t get an offer for your business in the first couple of months that you’re on the market, don’t get frustrated. It will take time for the right buyer to come along and see the potential.
As a business broker, I can help you connect with the right buyers. Contact me today if you’re ready to get serious about selling.