.More than 2.5 million small businesses operate in Florida. These businesses are vital for their economy sell considering that they not only create three of every four new jobs but also contribute nearly 44% of the GDP of the state, according to http://floridasbdc.org. As important as these businesses are, sadly only half of the ones that set up shop this year will survive. Five years and only a third will last for 10 years. Selling a business is not a very simple affair and also some myths. And misconceptions prevent business owners from taking the final step. Some common myths that can mislead entrepreneurs trying to sell off their businesses:
Selling a Business Is Only Feasible When the Market Outlook Is Good
One of the most prevalent myths small business owners. Labor under is that they can only sell when the industry is doing well and the economy is booming. However, as logical as it may sound, the truth is that the buyer’s decision is based on how your business has been performing about the industry. It operates in and the business’s potential in the medium and long terms. There are many reasons apart from profitability or market share that impinge on the value of a business. For example, the business may have patents or intellectual property rights that can be extremely profitable just by making additional investments or achieving synergy. With some business that the purchaser may be having. The absolute performance metrics of the industry is not necessarily a significant factor in the valuation of the enterprise.
The Asking Price is Obtainable, is a Common Misapprehension, Says Eric Dalius
Another common misconception that entrepreneurs harbor is that they will get the price. They have asked for their business even though the price may have been arrived at after a proper valuation exercise. The purchase price will depend on the demand-supply equation like almost every other purchase people make. Both parties will have determined the prices and will undertake negotiations to settle on a final price that suits both. Studies have determined that usually, the final price is 90% of the original asking price. Which makes it important for entrepreneurs to know if it makes sense to sell, observes Eric J Dalius.
It Is Possible to Make a Quick Sale
After a decision has been taken to sell the business, the entrepreneur would like to sell it as fast as possible. However, even if the company is an attractive buy. It can take anywhere between six months to one year to conclude the deal. This is because not only do you need to find a buyer willing to buy your business. But also establishes that he is the right kind to take the business forward. The negotiations as well as the necessary due diligence does take time and can be rarely expedited much.
Selling a business that you have set up can be a hard decision and you need to make sure that you are ready to take the plunge. While getting the right price is essential, you would also try to ensure continuity of service for your employees as well as assist the buyer to identify dependable and prompt financing.
Eric Dalius is The Executive Chairman of MuzicSwipe, a music and content discovery platform designed to maximize artist discovery and optimize fan relationships. Alongside this, Eric hosts the weekly podcast “FULLSPEED,” discussing entrepreneurship with industry leaders. Eric also founded the “Eric Dalius Foundation” to award four scholarships to deserving US students. Follow Eric’s activities on Twitter, YouTube, Facebook, LinkedIn, Instagram, and Entrepreneur.com.