Selling a Business
Ask Bob

Ask Bob About Selling a Business

?Should I place a large display ad or a small classified ad?
Run a small classified ad. Anyone who is really serious about purchasing a business opportunity will be scanning small classified ads. Keep the copy brief and to the point. Rather than running a large ad, run the ad over a period of time. If you are using a newspaper as your advertising media, however, advertise only in the Sunday edition.

?Are business brokers worth the commission?
Especially if you are selling a larger business, you may find it easier to find a qualified buyer using the resources of a business broker. For a very small local retail or service business, however, you might do just as well selling the business yourself.

If you are hesitant to use a business broker, make every effort to sell the business on your own for a reasonable amount of time. If you aren't successful, then consider giving your listing to a business broker.

Once you start advertising your business, you may find some business brokers willing to list your business on a nonexclusive basis. But wait until you can no longer afford either the time or effort required to sell the business yourself before you give over the listing to a business broker on an exclusive basis. Remember that a business broker will put much more effort into selling your concern when it is being listed exclusively through that agency.

?If I provide seller financing, what interest rate should I charge?
If you must provide seller financing in order to complete the sale, you should charge an interest rate that is at least a couple of points higher than those currently being offered by commercial banks. You are almost certainly taking on considerably more risk than is involved in a typical bank loan. Also, you want to provide the buyer incentive to find his own financing through a bank, relatives, or any other source that may be available.

?How long will it take to sell my business?
Assume it will take a lot longer than you think it will! While it varies greatly from one transaction to the next, the typical selling time for a very small business such as a retail or service business ranges from two to six months. For a larger business, a six- to twelve-month time frame is more common.