Why Selling A Business Is Different From Selling Other Things

By Author: Ned Shaffer
Total Articles: 332
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You've sold other parts of the past. But, get ready. Selling a business is completely different. Throw out whatever you know about selling and find out why selling your small business requires a completely different attitude.

An Intangible Product

Just about everything for sale is a real thing. You can see what you're getting. You know exactly what you're buying. Sadly, this is not the case when it comes to selling a business.

Your company possesses a collection of concrete assets: your equipment, inventory, accounts receivable, and so on. Contrary to what a great deal of people believe, these are the items that bring the smallest amount of value to your company.

It's the intangibles - the particular assets that cannot be recognized by the senses - that make all the difference with a buyer. These are things such as:

Quality of management
Uniqueness of business design
Industry and marketplace position
Systems and operations in place
Quality of accounting and information methods
Relationships with distributors & suppliers
Customer loyalty and diversity
...
... Product/service high quality and diversity
Top quality and morale associated with employees
Patents, trademarks and other intellectual property
The value of these intangibles -that is, the total amount paid by the buyer over and above the value of the particular tangible assets- is referred to as a positive manner.

So what does this mean to you, the seller?

The true value in your company is found in things you cannot see, hear or perhaps touch. As the vendor, it's your job to be able to convince buyers that these things exist and can earn them profits. Bet you don't have to do this with whatever you happen to be currently selling.

A Product With No Objective Benefit

A business is worth just what someone is willing to pay for it. End associated with story.

Isn't this particular true of every product? Sure. But with other items you have the ability to compare to other sales in order to set a price. Simply how much is your house really worth? Ask your real estate professional. She'll quickly research comparable sales, because will the purchaser's agent, and determine a relatively accurate probable value. There is an efficient marketplace at work for most products.

But not when it comes to marketing a business. Although you will want to look at comparable businesses when trying to set a cost, you have to keep in mind that there really are no similar businesses. Your business is unique because of all those intangibles we discussed.

Selling Your Small Business Fast