The Hard Truths About Selling a Micro Business
Selling a small-scale company isn’t like selling a larger business. There are several factors that you will need to consider when you enter the market; because whether you are selling a main street, SaaS or eCommerce business, all of these “micro” businesses will be competing with the big boys.
Here are the hard truths about trying to sell a micro business in 2022 and how to deal with them.
1. Limited Pool of Buyers
As a small business, you may not be very well known. If your audience is small, then there is a good chance that your potential buyer roster is small too.
You can make your small business stand out by creating and managing a unique brand presence that attracts an engaged audience. Social media, and digital spending is now an accessible and affordable way for a lot of businesses to do this. You want to show the world that you can offer something different from your competitors.
Responding to Google Reviews also demonstrates your personality and commitment to customer service, which is essential in setting your business apart.
2. Less Cash Flow
Many small businesses cannot afford to hire accounting, marketing, or sales teams to help grow and manage the business. It is up to you as the business owner to develop a strategy.
How can you do this?
· Create surveys or social media polls that ask specific questions.
· Use free analytic tracking websites. You can find a list of a few here.
· Seek professional advice from a friend, family member, or mentor.
· Stay on top of your spending by documenting every transaction in an Excel sheet or integrate with accounting software.
· Use word of mouth to get your name and brand out there.
3. Unmanaged Expectations
Even though you have spent years working on your small business, the actual valuation, your anticipated valuation, and the final sale price rarely (if ever) match up. You need to be prepared for that. During the due diligence period, the buyer and seller go back and forth exchanging documents and try and come to an agreement, and that frequently means readjusting your expectations. It can be difficult to navigate this, so consult widely with experts so you know when it’s time to walk away from a potential deal or when it’s time to compromise.
4. Brokers Are Expensive
Many business sellers often seek out a broker. The issue is that their commission can be between 10-12%, which is more than most small business owners can stomach, especially if that cash is needed to fund a new business or retirement. On the flip side, if the final sale price of the business is small, the commission may not be worth it for the broker, making it difficult to find one who will help you.
It is possible to sell the business yourself, which means considerable cost savings. We go into more detail as to how you can do that here.
Selling a small business can be a struggle, but BuyAndSellABusiness.com is here to help. We’re serious about making Business Ownership Real for people around the world, and as we relentlessly advance this cause every single day, sellers will reap the benefits.
If you’re trying to sell your business, check out our new Full Serve Solution. It’ll save you thousands over a broker, get you the support you need, and allow you to list for free, while giving you control from start to finish.
Opinions expressed here by contributors are their own.
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