Marketing Your Business

Marketing your business in the proper way helps a buyer understand the total value of what they’re buying. That’s the purpose of the Business Marketing Package.

Remember – “It’s not the steak you are selling, it’s the sizzle.”

The objectives of the Business Marketing Package include showcasing the opportunity, providing information and data, creating a professional impression and portraying the business both visually and verbally. Opportunity is the key attribute buyers are looking for. As a result a buyer only looking at the financial information is usually a poor prospect. Most buyers will first see your business on paper so how it’s presented is critical. The buyer must understand the total value. When both buyer and seller have a similar understanding of value, negotiations become smoother. When choosing an agent, ask to see their marketing packages. Ask for an example.

As a seller it’s important you understand what buyers are looking for when purchasing a business. In most cases they are looking for some or all of the following:

Opportunity to participate in free enterprise and the American Dream. They want to see a return on their investment. They would like to leverage their money by financing the transaction. They want employment with rewards and a challenge, perhaps mixing work with their passion. Many are looking to build a retirement nest egg or simply for tax advantaged wealth building

In addition to what we’ve just described, they expect a well-run, professional business, with solid books and records.

How Long Will it Take

What truly motivates a buyer to make an offer is a business priced right with opportunities for improvement and growth.

More than 20 percent of all businesses are for sale at any given time, so there’s competition for buyers. Businesses that are properly priced and professionally marketed can sell in four to six months. Optimizing sales price and time on the market occurs when the seller understands what buyers and banks are looking for and recognizes they are competing with other businesses on the market.

Based on numbers from the SBA there are 1.1 million businesses for sale at a given time in the $50,000 to $10 million price range. Only one out of three will sell at the price the owner wishes or on the timing desired. There are several reasons a business does not sell. Here are the top ones:

The number one reason is that the business is overpriced.

The second reason is that the purchase cannot be financed due to inadequate books and records or poor tax returns. There are very few cash buyers.

The third reason is that the business is not packaged and marketed professionally to show the full value.