This article are provided for information purposes only, and are not intended as legal advice.


Businesses for sale – can’t find what you are looking for?

July 23rd, 2009

During the summer, everyone is on holidays, businesses advisers such as accountants and lawyers take time off, businesses often slow down in the summer months therefore not as many people list their business for sale in the summer.  Your are frustrated and if you find a business, the owner is preparing the business for sale but his price is based on what he needs to retire and not based on the fair market value of the business.

 

Why are there less businesses for sale in the summer?  There are a few reasons.  Holidays of owners, holidays of business advisers and holidays of investors. Summer has typically less sales since so many customers are away on holidays.

 

Depending on the business, fall is often a busy time of the year for the business and the old owner wants the profits of this period of time before listing his business for sale.  As a result, most owners only post the business for sale when sales are slow again.  The owner rarely factors in to his/her thought process that it takes months to sell and close a business for sale.   The business owner usually thinks that a sale will happen as soon as he lists his company for sale and never anticipates that it will take months to close. 

 

If you want to sell in the summer, an owner should list the company in the fall – assuming that it will take six to twelve months to close the sale.  Remember, preparing the letter of intent, conducting due diligence and have the lawyer prepare the purchase and sale agreement can take up to two months and sometimes longer.  It is possible that the first person buys your business but the likelihood of this taking place is slim.  Do not list your business in the month that you want to close the transaction, you need to work backwards from the anticipated month and then guesstimate how long it will take to find a buyer.  This assumes that you are asking a fair market price.  If your price is in excess of fair market value, give yourself extra time to sell the business because it will be difficult if not impossible to find a buyer who will over pay.


Filed under: Buying a business — Gary Landa @ 12:14 pm


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