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Important Points for Selling to a Family Member

Every business owner will eventually have to turn over control of their business to someone else. There are many avenues for how this can happen. They range from selling to a prospective buyer, selling to a competitor, or turning the business over to a family member. The key is to start thinking about all of these options for several years before you end up in a situation where you are actually forced to sell.

Working with a Business Broker at American Business Acquisitions in the greater Chicago area can help you determine what sales options are optimal for your specific situation. To help shed some light on the options above, here are some variables to explore when you decide to transfer your business to a family member.

Tax Advantages 

There can be significant advantages when transferring a business to a family member. Without a doubt, the top advantage is the fact that the transfer can be considered a gift. This approach will help reduce your real estate taxes. You might also be able to maintain some control over the business as well, depending on how the agreement is written. For many business owners, this factor can be a big advantage.

Seller Financing 

When transferring a business to a family member, one item you’ll want to explore is seller financing. This is a common practice in general, although it is even more common when transfers to relatives are concerned.

Seller financing is a versatile option of implementing a private annuity. A private annuity can spread payments out across a long period of time. This option can be a win-win situation for both you and your relative. This would ensure a long-term stream of income as a result of ongoing payments. In turn, this decision might make ownership more financially realistic for your relative.

Legal Agreements  

It Is important to keep in mind that selling to a relative no way negates the need for a buy-sell agreement. Even when you’re dealing with your most trusted family members, having a legal agreement in firmly in place is a must. This is an invaluable tool that protects everyone involved.

A buy-sell contract will clearly outline all aspects of the arrangement. This agreement should include the value of the business, amount being paid, information on which employees will be retained, the current business owner’s level of future involvement, parameters of financing, and much more.

Working with Professionals 

Ultimately, there is a spectrum of potentially powerful benefits that are associated with transferring ownership of a business to a relative. While you can expect the IRS to closely evaluate the sale, this should not dissuade you from considering this option. The Business Brokers at American Business Acquisitions are experts at buying and selling businesses, and they understand the specifics of transferring a business to relatives. Early on in the selling process, you’ll want to work with a professional to help you gain tremendous insight into the best way to proceed.

Copyright © 2022 American Business Acquisitions, Inc. 

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Disruptive Factors in Selling Your Business

Down the road, every business owner will need to entertain the idea about selling his or her business. When the time comes, you’ll need to be ready to tackle a range of obstacles, as the selling process can be both confusing and time-consuming. This is especially true for those who haven’t had to go through the process before. Here are some of the key reasons why deal can fall apart when you’re selling your business.

Psychological Factors

Just like sellers, buyers will enter the process with a wide variety of preconceived notions about how the process should work, as well as what they consider to be “a great deal.” The psychological factors when it comes to both buying and selling a business should not be overlooked. Sellers specifically need to understand the specific wants, needs, and desires of a potential buyer, as well as their own psychology.

Even serious buyers may have highly unrealistic expectations regarding various aspects of a business. This ranges from price to opportunities for future growth. In some cases, buyers may drag their feet due to the fact that they are not quite ready or have a sense of urgency to buy a business.

Buyers can also be influenced by outside parties, which could be from friends, family members, or advisors. In short, sellers may discover that buyers might actually be several people who are forming a collective opinion regarding the business.

Seller Psychology

A seller’s own psychology can play a major role in whether or not a business is sold successfully. Many sellers start the process without fully understanding what is involved. This factor, of course, highlights the tremendous importance of working with professionals for months, if not years, before you actually place your business on the market. The professionals at American Business Acquisitions can help streamline the selling process in the greater Chicago area and help sellers understand all aspects of what is involved.

Another major obstacle is that sellers often have unrealistic expectations about both price and the time frame it takes to sell their business. It is very important to enter into the selling process with open eyes and realistic expectations in place. This includes establishing a fair price, and understanding that it could possibly take up to a year before the right buyer is found, but that is very rarely the case at ABA.

Acts of Fate

Sellers should remember that there are many “acts of fate” that could disrupt a deal. It could seem as if everything is moving along smoothly, and at the last minute a buyer isn’t able to secure the funds needed to close.

All parties should understand that until a deal is finalized, any problem can still arise. In fact, they can arise from the most unexpected direction, but it is difficult to anticipate and spot every single potential disruption. The complexity of selling a business is one of the main reasons why so many business owners opt to work with an advisor at American Business Acquisitions.

Copyright © 2022 American Business Acquisitions, Inc. 

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How to Capitalize on Your Company’s Uniqueness – A Quick Guide for Selling a Business in the Chicago Marketplace

It is well known that the city of Chicago has a long history of industry and commerce, offering a business environment with natural competitive advantages rooted in its location, infrastructure and workforce.  Given the fact that there are more than 1.2 million small businesses operating in the state of Illinois, it is essential for small businesses to establish and market themselves with a niche or specialized foothold within their specific industry.

Although it’s not always obvious, every business is unique in one way or another.  Whether it be how long you’ve been in business, that the company has been passed down for generations, or because it’s located two blocks away from Millenium Park, there is some special aspect that sets your business apart from its competition.  Oftentimes however, these specialties aren’t promoted to their fullest potential. Although understandable, this oversight is a startegial error which can be especially costly during the small business acquisition process. As the business owner, you know your company better than anyone and being able to effectively convey these aspects to your broker will ultimately lead to the most profitable outcome.

There are of course many unique attributes of a company which can make it more attractive to a possible acquirer. This fact is especially true in the saturated Chicago business listings. Certainly, the numbers are important, but potential buyers will look beyond the figures alone. Factors that make your company special or unique can often not only make the difference in a possible sale or merger, but also can dramatically increase value. Review the following to see if any of them apply to your company and if they are transferable to new ownership.

Brand Name or Identity

Does your service line have a recognizable name? While it doesn’t have to be Sara Lee or Quaker Oats, a name that is well known within a specific geographic region, or one that is identified with a specific product can be extremely advantageous. A product with a unique appearance, taste, or image is also a big plus. For example, Uno Pizzeria & Grille has a unique regional identity, and also a distinctive taste. Both factors are big pluses when it comes time to sell.

Dominant Market Position

A company doesn’t have to be a Fortune 500 firm to have a dominant position in the marketplace. Businesses who are major players in a niche market are in a dominant position as well. Possible purchasers and acquirers, such as buy-out groups, look to the major competitors in a particular industry, regardless of how small it is.

Customer Lists

Maintaining an accurate and current list of customers is important as it can be a valuable resource in many aspects of your business. Not only can it provide leads for sales, a group for testing new products but it can also become an effective method to provide positive customer feedback and social media promotion. Newsletters and other publications have, over the years, built mailing lists and subscriber lists that create a unique loyalty base. Just as many personal services have created this base, a number of other factors have contributed to the building of it. The resulting loyalty may allow the company to charge a higher price for its product or service.

Intangible Assets

A long and favorable lease (assuming it can be transferred to a new owner) can be a big plus for a retail business. A recognizable franchise name can also be a big plus. Other examples of intangible assets that can create value are: customer lists, proprietary software, an effective advertising program, etc.

Price Advantage

The ability to charge less for similar products is a unique factor. For example, Wal-Mart has built an empire on the ability to provide products at a very low price. Some companies do this by building alliances with designers or manufacturers. In some cases, these alliances develop into partnerships so that a lower price can be offered. Most companies are not in Wal-Mart’s category, but the same relationships can be built to create low costs and subsequent price advantages. 

Difficulty of Replication

A company that produces a product or service that cannot be easily replicated has an advantage over other firms. We all know that CPA and law firms have unique licensing attributes that prevent just anyone off of the street from creating competition. Some firms have government licensing or agreements that are granted on a very limited basis. Others provide tie-ins that limit others from competing. For example, a coffee company that provides free coffee makers with the use of their coffee.

Proprietary technology

Technology, trade secrets, specialized applications, confidentiality agreements protecting proprietary information – all of these can add value to a company. These factors may not be copyrighted or patented, but if a chain of confidentiality is built – then these items can be unique to the company.

As any seasoned business person will testify, selling a company is one, if not the biggest deal of a professional career. Countless hours have been poured into cultivating a company with unique service and offerings, so when it comes time to sell, it’s crucial to entrust in a Chicago business broker who is not only well versed in local market, but also one who appreciates your company’s unique attributes and the nuances of the industry it serves. By understanding these industrial strengths, your broker will be better able to maximize valuation and make the selling experience not only smoother, but one that is more financially advantageous.

For a free consultation on selling a business or hiring a business broker in Chicago or across the State of Illinois, please schedule a virtual meeting using http://calendly.com/abameeting or contact us to find out how we can help you achieve the highest value and close on the sale of your business or company.

Copyright © 2021 American Business Acquisitions, Inc. 

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Put Your Strengths First When Selling Your Business

No one understands better than you do, the finer points and potential of your business; however, that doesn’t mean that prospective buyers will have instant awareness of your business’s various strengths. When you are looking to sell a business in Chicago or elsewhere, you now have two very important jobs. First, you need to prepare your business to be fit for sale. Your second essential job is to showcase your business’s greatest strengths. At the end of the day, articulation as to why your business is worth buying, must come from you. At American Business Acquisitions, this effort, of course, will be supported by our highly qualified Chicago Business Brokers and M&A Advisors.

Understand Who Will Buy Your Business 

Most people are vastly inexperienced when it comes to selling a business or have never sold a business. They don’t fully comprehend what is involved in positioning one’s business for sale. The bottom line is that not every business is a good fit for every buyer. Intuitively analyzing candidates to locate the right buyer for your business will efficiently expedite the process. Yet another compelling reason working with experienced business acquisition professionals is critical. A skilled business broker or M&A Advisor will not only know what buyers are looking for, but also what sellers need to do to get their business ready to sell.

How to Navigate Roadblocks 

Selling a business, especially if you attempt to do so without the guidance of professionals experienced in Business Acquisitions, can be an energy draining, and certainly, time consuming process. Successfully running a business requires attention to detail and razor focus. Unfortunately, these can both be compromised when owners attempt to put on yet another hat and handle the sale of their business on their own.

While you are attempting to sell your business, it is critically important that you maintain the current standard of operations. The last thing you want is to risk weakening the finances of your business while you are waiting to find a buyer. Keep in mind it takes months, a year, or even longer to find a buyer for the typical business. While at ABA we have a much more efficient process in most cases, during he sale prices it is key not to allow for deterioration of your business in the interim.

Think Like a Buyer

Preparing your business to be sold isn’t as simple as making a few cosmetic changes and calling it day. Instead, you’ll want to think like a buyer.

What would you want to see if you were buying a business? Wouldn’t you be a great deal interested in knowing all about that business and how it operates? Who its key employees are? How likely those key employees are to stay, who the main customers and suppliers are, and the strength of the business location and competitors? Of course. You would also want a very detailed picture of the business’s financial situation.

In short, your interest would be to clearly understand what the business does and what it’s really worth. How financially healthy it has been in the past, what the business’ prospects are moving forward and, in general, how much effort the business will take to operate. These are exactly the kind of key facts that any seriously motivated and positioned buyer will want to know. It’s natural that a buyer would expect to learn this information before making a decision.

At the end of the day, working with a Business Broker or M&A Advisor is one of the easiest ways to streamline the sales process. Thanks to years of experience, they already understand Business Valuation in the Chicago market and beyond, the pitfalls that you may experience as well as what is needed to position your business so that you can find the right buyer quickly and receive the best price possible.

If you’re interested in hiring a business broker who services Chicago and the entire State of Illinois to help you sell your business or consult on an exit strategy, contact us here or schedule a free consultation by selecting a date and time that work best for you.

Copyright © 2021 American Business Acquisitions, Inc. 

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10 Mistakes that Sellers Make

If you’re selling a business, it’s important to understand the common pitfalls and mistakes sellers make so you can ensure a smooth and successful process. In this post, we outline the top 10 mistakes that sellers make:

1. Not knowing where to price the business

Not knowing the proper pricing for your business is one of the most common mistakes. Pricing the business too high or even too low can raise red flags that turn buyers away. Before making the decision to sell and placing on the market, it can be beneficial for sellers to work with a qualified business broker to price their company appropriately. An experienced business broker has both the technical ability and the market experience to produce the most realistic pricing.

Fair Market Value

Asking Price is what the seller wants

Selling Price is what the seller gets

Fair Market Value is the highest price the buyer is willing to pay and the lowest price the seller is willing to accept.

2. Not preparing the business for sale

Determining the price point is only the first step. Before selling a business, you should be as prepared as possible with current financial, legal and operational information for potential buyers to review. You can expect buyers to want to see this information and having it ready will make the business appear more organized. Demonstrating preparedness places the business in a favorable light, while being unprepared can delay the selling process and turn buyers away.

3. Not being able to see the business from a buyer’s perspective

As the owner of a business, it can often be difficult to step outside and see the business from the buyer’s perspective. It’s natural to view your own business in a favorable light and overlook problems and issues, however your ability to do this could help you sell your business faster. You have to approach selling your business realistically, knowing that a potential buyer will be looking for the negatives as well as the positives and weighing those circumstances. The ability to not only recognize flaws in the business, but actually present them as areas of potential growth will make your business very attractive to a buyer.

4. Not knowing the buyer

By knowing the buyers, their motives, their interests and their backgrounds, the better equipped a seller is to make informed decisions about whether they are the right people to operate the business. Selling a business is bound to have challenges, however the better you know the buyer, the better you can anticipate their needs and concerns and have the necessary information available. The more you can understand the buyers motives, the better position you’re in.

5. Trying to sell to uninterested buyers

There are plenty of “potential buyers”, but the questions is, are they serious buyers? A potential buyer may display interest, but when it comes down to it, they may back out because they weren’t serious, have unrealistic expectations or only want to buy on their terms. Don’t waste your time on those who aren’t serious about purchasing a business, and save the energy for those who are.

6. Thinking you know it all

Many business owners think they know it all, that nobody knows their business like they do and will get caught up in trying to do everything themselves. They try to handle every aspect of the sale when in reality, it should be left to the lawyers, accountants and business brokers to work together to make a sale happen. When the seller doesn’t ask for help and the deal doesn’t go through, they will often blame others, but really they were their own worst enemy by trying to do it all themselves. Not using outside advisors, such as a professional business broker or intermediary, can be a serious mistake in achieving the highest value, etc.

7. Not understanding the structure of the deal

The price is only one piece of the deal – however many sellers will see the price on an offer and say “no” without understanding how the deal is structured. The structure of the deal is arguably more important than the price alone. The terms and conditions of the deal are where the negotiations can happen that allow for flex on the price.

8. Not being able to walk away from the deal

It can be easy to get so wrapped up in a deal that you lose sight of the big picture. You may not recognize when a deal is a “bad deal”, and when to walk away and move on in order to save your time, resources and sanity. Sellers don’t want a deal to get away, but in some cases this is what needs to happen in order to move on and find the right deal and the right buyer.

9. Waiting too long to sell

Too many owners wait until the last minute to decide to sell their business. They wait until business is down, or they are completely burned-out, or their business partnership has soured completely. The time to sell is before the emergency happens. The time to sell is when business is good. The time to sell is prior to when exasperation hits. The old adage is that a business owner should think about and plan the eventual sale of the business the day after it is started or purchased.

10. Changing your mind

One of the worst things you can do while in the process of trying to sell your business is change your mind. It happens more often than you think – just before closing, the seller realizes they don’t really want to let go of their business and backs out. This not only wastes time, energy and resources, but could also deter buyers away from your business in the future if you decide to sell again. Allowing the potential buyers to have full trust in you is a key to selling your business. Wait until you are absolutely sure you want to sell, that way you and everyone involved can feel confident in the process.

This is what business brokers and M & A professionals here at ABA deal with every day, equipping them to help you prepare honest and valuable answers. So if you’re interested in hiring a business broker in Chicago, the Chicago Suburbs, or the State of Illinois to help you sell your business or consult on an exit strategy, contact us here or schedule a free consultation by selecting a date and time that works best for you.

Copyright © 2021 American Business Acquisitions

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Top Questions Business Buyers Want Answers To

If you’re thinking about selling your business in Chicago or greater Illinois, it’s essential to know the questions business buyers will want answers to. For example, one of the more obvious questions is: “If this is such a good business, why is it for sale?”

Answering this question appropriately could be the key to making a sale (or losing one). If you give a vague answer, buyers may assume the worst and stop showing interest in your business. If you have owned your business for 10-15 years and are just ready for something new, buyers will likely understand. However, if you have only owned the business for a few years or less, that may raise some red flags to buyers of why you want to sell, so be careful how you approach this question.

A common reason for selling is because of health issues, and if that’s the case, it’s fine to be open about that with potential buyers, so they have a complete understanding of your reasoning. The worst thing you can do as a seller is giving vague answers or no answers, as buyers will tend to see that as a red flag and potentially walk away. Honesty is always the best policy.

Navigating selling your business or company can be challenging if you’re trying to do it alone, which is why retaining a business broker or intermediary may be extremely useful. Business transaction professionals have experience with all types of business opportunities, dealing with buyers and sellers, what information needs to be provided and have a handle on the entire business sale preparation and process from analysis to closing on the sale.

One of the most valuable insights a business broker can offer is how to address buyer questions, such as:

Why should I buy a business rather than starting my own?

How are businesses priced?

What does it take to be successful?

How long has the business been in business?

How long has the present owner owned the business?

How much money is the business making?

Are the books and records readily available?

Will the new owner help me learn the business?

These and many other questions are ones that business brokers and M & A professionals here at ABA deal with every day, equipping them to help you prepare honest and valuable answers. So if you’re interested in hiring a business broker in Chicago, the Chicago Suburbs, or the State of Illinois to help you sell your business or consult on an exit strategy, contact us here or schedule a free consultation by selecting a date and time that work best for you.

Copyright © 2021 American Business Acquisitions

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What You Should Know About Selling Your Chicago Business

It goes without saying that selling your business is one of the most important decisions you will ever make. Your business represents years, decades or perhaps a lifetime of hard work, dedication and passion. When it comes time to sell, there are a few key steps you don’t want to miss, which is what we will outline in this article.

Plan Ahead. One of the most important steps you can take as a seller is to actually begin the sales process and planning far in advance of the date you plan to put your business on the market. Working with an experienced business broker in Chicago, even before you’re ready to sell, is a great way to ensure that you have everything ready and know what to expect when the time comes. Doing this can also help you avoid the abundance of pitfalls that can come with selling a business.

A business broker can also help identify weaknesses in your business and help you address those issues. Your broker can help you with everything from strategy and negotiations, maintaining confidentiality and establishing the market value of your business, to connecting you with other seasoned professionals, such as accountants and lawyers.

Be Flexible. Another important thing to remember when selling your business is to remain flexible and open-minded. Selling your business may not go as planned, and you will need to remain respectful to your potential buyers and be able to anticipate that they will need a multitude of information to make an empowered decision.

The right “seller psychology” is essential. You should not attempt to rush or force a sale or overprice your business. In short, you need to keep “your head in the game” and as much as possible, keep your emotions out of the process. 

Be Realistic. It’s important to understand the statistics so you can be realistic in your approach and expectations. About 75% of sellers will end up receiving their asking price, and businesses listed as “all cash” generally do not sell. Seller financing will be highly likely, so the more realistic you can be about the terms of your sale, the better chances you have of selling the business. Another way to increase your odds is a reasonable down payment. Being will to offer financing will make  statement to prospective buyers that you believe in the business and its ability to generate revenue.

In summary, keeping an open mind and keeping your emotions out of the process will increase your chances of selling. It’s understandable that you may be ready to sell and move on, but the reality is that you won’t be able to just walk away, there is a process to be respected. Transitioning the business to a new owner is usually an ongoing process, and working with a business broker can help you navigate this process with ease and increase the chances of selling.

For a free consultation on selling a business or hiring a business broker in Chicago or across the State of Illinois, please schedule a virtual meeting http://calendly.com/abameeting or contact us to find out how we can help you achieve the highest value and close on the sale of your business or company.

Copyright © 2021 American Business Acquisitions

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10 Ways To Avoid Wrecking A Deal When Selling A Business

Selling a business is a complex process, especially when it comes to finalizing the deal. There’s a lot of room for error, misunderstandings and unexpected occurrences that can throw the process for a loop. It’s imperative to carefully think through the entire process well in advance and try to be as organized as possible while keeping all parties informed.

We’re going to take a look at the top 10 ways to avoid wrecking a good business deal.

  1. Confidentiality – At the top of the list for a reason, the number one way to avoid wrecking a good deal is honoring confidentiality. This is vital to not only avoid a breach, but to maintain a level of professionalism and respect. Hiring an experienced business broker in Chicago can help you with the art of maintaining confidentiality.
  2. Be Flexible – No deal has ever gone “exactly” as it was planned, so be flexible and open-minded as you navigate the process. Never go into a deal expecting all your terms to be met. If you’re too rigid, this can also be a turn off to the other party involved and ruin the deal.
  3. Be Open to Negotiations – Negotiations are extremely important, and this goes hand-in-hand with being flexible. You may not be able to have all of your terms met, but you can always work something out as a compromise to keep everyone happy and the deal moving forward. Sellers are used to being their own bosses, but when it comes to successfully selling a business, no factor is quite as important as a willingness to negotiate.
  4. Prepare Ahead – If you want to lessen the risk of losing out on a good deal, make sure you’re well prepared ahead of time. Sellers will want to make sure they have several years of records as well as legal and accounting documentation ready and well-prepared. Serious buyers will want to see these records as well as the financial information for your business. It’s always better to be overprepared in these situations.
  5. A Realistic Selling Price – An If you inflate your price too high, it will decrease the number of serious buyers that show interest, and could also make the seller seem uninformed. If you’re not sure where to price your business, hiring a business broker can be extremely valuable.  If you’re in the Chicago area, visit our home page and contact us to hand over the valuation expertise.  One of the best ways to increase your chances of finalizing a sale is to establish a fair price for your business.
  6. Maintain Operations – Once the business hits the market, it can be easy for the seller to lose sight of the day-to-day operations and “check out” before the business is sold. You’ll want to continue to operate your business as though it’s not for sale in order to maintain the reputation and value of the business. The reality is, it make take months or even years to sell and close a deal, so you don’t want to lose customers, operational flow or value in the process.
  7. Keep up the Momentum – A sure way to kill a deal is by losing momentum, initiative and letting communication go dormant. The process can be long and tedious, but working with a business broker to help sell your business can help you make sure you take the necessary action, have someone to look to for guidance and who can help you maintain momentum.
  8. Consider Your Buyer’s Needs – If you plan ahead and have your documentation ready, this will be attractive to any serious buyer. You can expect your buyer will need a variety of information from sellers such as appraisals of assets, information on environmental regulations, and more.  Sellers should have this kind of key information ready and waiting.
  9. Leverage Competition – Encouraging and knowing how to leverage competition can give you a leg up when it comes to closing a great deal. Having a competitive situation on your hands is a good problem to have given that the buyers will know there is more than one interested party. Brokerage industry professionals understand the delicacies of presenting this information.
  10. Seller Participation – Finally, sellers must stay involved in the entire process. Even after the business is sold on paper, offering to help with the transition goes a long way and creates a lot of trust and respect in the process. This can also help ease buyer concerns and make them more likely to close the deal knowing you will be there to help.

There are many potential reasons why a deal could fall apart.  You won’t be able to control every single variable, but by following the ten tips outlined in this article, you will be well on your way to increasing your chances of successfully completing a deal.

For a free consultation on selling a business or hiring a business broker in Chicago or across the State of Illinois, please schedule a virtual meeting http://calendly.com/abameeting or contact us to find out how we can help you achieve the highest value and close on the sale of your business or company.

 

Copyright © 2021 American Business Acquisitions

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Selling A Business In Chicago? Here Are 3 Warning Signs To Look For In A Potential Buyer

When buyers are looking to purchase a business in Chicago, the most important step is to perform their due diligence when it comes to researching the business and the seller. A large percentage of sellers, however, fail to do the same by investigating the buyers.

The process of working with a prospective buyer can have challenges and disruptions. Deals fall through all the time, costing both parties a tremendous amount of time, effort and resources. Sellers often lose money during this process, but if you know what “red flags” to look for ahead of time, you can avoid potential disruptions and make sure the process of selling your business in Chicago is easy and smooth.

Selling your Chicago business? Here are a few key questions you will want to ask a potential buyer:

-What other businesses have you considered, if any?

-How much equity will you be committing? 

-Do you have any experience in this specific business, niche or market? 

Warning signs you should look for when dealing with a buyer

It’s imperative to look for these red flags early on in order to avoid wasting time and money. Here’s what to look for:

Lack of communication

Poor communication from a potential buyer could mean lack of commitment and seriousness about purchasing your business. An interested buyer will make sure you know they’re interested! If there is little communication, “flakiness” or lack of interest, it could indicate the buyer changed their mind or was never serious to begin with. It’s best to move on and explore other options in this case. 

The buyer delegates the process to someone else

Another potential red flag is when the process becomes turned over by the buyer to a junior member of their team. A serious buyer will likely want to be involved and invested in the process. Make sure you’re clear on the buyer’s intention with the business and that those intentions align with yours.

Failing to provide details (especially financial)

If the prospect fails to provide key information, especially information regarding their financial capabilities to complete the deal, this is definitely a red flag. You want to make sure you have a buyer who is invested fully in the process, willing and able to provide the necessary information to ensure a smooth process. 

If any of these red flags pop up, reach out to the prospective buyer and ask to meet in person to discuss the situation.

Trust your intuition during the process – if you feel that a potential buyer isn’t fully committed, is simply window shopping or has unrealistic expectations of the type of deal to be made, simply move on. It’s better to cut your losses earlier and free your time and energy for buyers that are a better fit.

It’s not done until it’s done!

Warning signs can present themselves during the entire buying and selling process, especially just prior to closing the deal. Pay extra attention if:

  • the attorney representing the buyer is inexperienced or overly aggressive
  • there are multiple requests for last minute changes
  • communication falls out the as closing the deal approaches

A potential remedy for these situations is to get your own attorney involved to come to a resolution that works for anyone.

The process of selling your business is bound to have some challenges, but being able to spot warning signs early on can help keep everything on track and working as smoothly as possible. Working with a business broker in the Chicago area is an excellent way to not only spot the red flags, but be able to respond appropriately.

If you’re ready to sell or buy a business in Chicago, click here to contact us. We’re here to help make the process easy and make sure all of your questions are answered.

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Copyright © 2021 American Business Acquisitions, Inc.

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The Transformative Benefits of the Entrepreneurial Operating System®

Damon Neth is a Professional EOS Implementer™ of the Entrepreneurial Operating System®.  He co-authored a best-selling book entitled X-Formation: Transforming Business Through Interim Executive Leadership.  He also has founded five companies and acquired four other companies.  Additionally, Damon Neth is an accomplished entrepreneur and a leading EOS® business coach.

EOS® is a powerful set of business tools that provide a framework that empowers companies to create a clear vision throughout their entire organization, and in the process, boost the health of the company as a whole.  This article discusses EOS® and how it could potentially transform your organization.

What is EOS® All About?

EOS® is based on the book Traction: Getting a Grip on Your Business, which is written by Gino Wickman.  The effectiveness of EOS® is underscored by the fact that EOS® is currently utilized by over 10,000 companies around the globe. 

EOS® is a powerful set of tools that, as Neth explained, “are being used by businesses every single day to grow, transform and capitalize on opportunity and deal with problems.  These tools provide strategic advantages and strategic tools that many organizations implement to become better, to beat their competition, to become stronger.”

How Can EOS® Benefit Your Company?

Through EOS®, it is possible to establish a clear vision for your organization.  Neth points out that cultivating this vision is about finding clarity of purpose so that every team member is pulling in the same direction.  When used from the top to the bottom of a company, the tools provided by EOS® can have a transformative effect.  Discipline and accountability are key focal points of EOS®, as it is through discipline and accountability that the health of companies can be enhanced greatly.

At the core of EOS® is the concept that everyone should share the same company vision.  That means that there must be good, consistent and steady communication.  In order to facilitate this level of communication and understanding, it is necessary to have a transparent system in order to remove barriers, blockers and impurities.  When properly utilized, EOS® creates an opportunity through which everyone can not only identify their own issues, but also find ways to solve those issues.

Managing People

The most important asset that any company has is its people.  As a result, it is absolutely essential to not only find the right people, but also to guide those people as efficiently and effectively as possible.  As Neth explained, “You’ve got to be clear and transparent with people about what you need and about what success ultimately looks like.  You want to make certain that everyone in the organization understands their job.” 

In a world that is becoming increasingly complex, the role of the generalist is quickly being eroded.  In its place, we discover that people’s roles within companies are, by necessity, becoming more and more specific.  All of this points to the increasing importance of clarifying people’s roles within companies, and what is expected of them.  Gray areas need to be eliminated as they impair team members’ understanding of their duties and responsibilities.

Communication is Key 

Everyone in the organization should understand not only the role of their respective department, but also their role within that department and the organization as a whole.  Once again, the key to success boils down to good communication and clarity of purpose and roles within the organization.  Everyone must be rowing in the same direction, and it is through weekly measurables that true progress can take place.

Copyright: Business Brokerage Press, Inc.

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