Business Brokers’ Tips on Minimizing Risk for Potential Buyers

Are you selling your business? Las Vegas business brokers can help you prepare to sell your business or consider the prospect long-term, you will need to engage in exit planning to make your business a less risky proposition for buyers. Doing so is not just a courtesy to the next buyer; it also strengthens the appeal of your business and shores up its current market advantages.

 

If you want to make sure that your business does not send out red flags to potential buyers, follow this advice from an experienced certified exit planning advisor:

Try to reduce your role in operations

To put this strategy succinctly: “make yourself redundant.” Many business owners inadvertently play up their own role in a business leading up to a sale as a way to energize buyers. While your cult of personality may help put a face on the business, it also sends signals that your departure could mark a distinct shift in company culture and performance.

 

Avoid this fear by placing increasing levels of trust on your management and oversight teams. If you can point to key processes and examples of effective management, then you can convince potential buyers they do not need you for the company to continue to succeed.

 

Audit your accounts and other departments for potential hiccups

The last thing you want to do when preparing to sell your company is try to hide a landmine of a lawsuit or tuck mounds of debt discretely off the balance sheet. Buyers who discover these lurking threats may be more apt to run away from a listing compared to if you had been up front about them.

 

To avoid letting such an occurrence torpedo your sale, order a line-by-line audit of accounts, inventory, recent sales and especially pending legal issues. If you can resolve these issues immediately, all the better. But if it will take some time to work them out, make sure you either delay your listing until they are minimized or disclose the risks to potential buyers up front.

 

Obtain a fair, neutral company valuation

One of the biggest risks to business buyers — and a frequent point of contention — is when a business is overvalued. Many business owners want to find ways to enhance the value their business represents and increase the asking price of their listing, but this may hurt their ability to get the maximum value for their business rather than help.

 

Read “Tips on How to Improve the Value of Your Business

While you should never undersell your assets or your performance, only a neutral valuation can give your potential buyers the objective information they need to accurately assess the business’s worth. After all, overpaying for a business and then seeing slow growth is one of the most common risks entrepreneurs face these days.

 

Work with a certified exit planning advisor who is also a licensed business broker and broker-salesperson

Selling a business is quite different from running one. You are likely going to need help to ensure that you perform the most critical housekeeping tasks that can reduce a buyer’s risk. This includes exit planning and business continuation planning, which can help account for retaining key talent and key business assets, which will put the buyer more at ease.

 

As a valuation consultant, exit planner, licensed business broker and broker-salesperson, Jamie Schwartz of Schwartz Strategy and Valuation has the experience and knowledge to help you make your business more enticing to buyers while also reducing their risks. You can start working with a certified exit planning advisor in Nevada who can help you perform these tasks and assure potential buyers by getting in touch with Jamie Schwartz today a (702) 278-1346.



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