Buying and Selling a Business
Buying a Business
Every buyer needs to answer the following questions:
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What is a fair price for the business? How can that be determined? Why does the seller want to sell? What are the rules of the game?
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How can you tell if the business is a genuine going concern or if it is someone else’s discard? What should you look for? How do you check it out?
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What should you offer for the business? What are the trade-offs between price and terms? How can you tell if the owner really wants to sell, is just testing the waters, or hopes to catch fool?
There are three basic approaches you can use to locate a business that is for sale: (1) Contacting business owners directly; (2) Contacting business owners indirectly through their service providers; and (3) using a business or real estate broker.
Selling a Business
Selling your business is a major decision that requires planning and preparation. Here are some key things to consider:
1. Know Your Business Value
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Understand what drives or reduces value in your company.
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Consider a business valuation analysis to identify strengths, weaknesses, and opportunities.
2. Get Your Financials in Order
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Ensure accurate and up-to-date financial statements.
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Clean up any irregularities in bookkeeping, taxes, or cash flow.
3. Prepare Your Business for Buyers
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Streamline operations and document processes.
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Build a strong management team so the business isn’t solely dependent on you.
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Reduce risks that could scare off buyers (e.g., legal issues, overreliance on one customer).
4. Understand the Market
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Research who potential buyers might be—competitors, investors, or employees.
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Know current market conditions for your industry.
5. Plan Ahead for the Transition
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Decide your role after the sale (stay on temporarily or exit immediately).
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Consider how employees, customers, and vendors will be affected.
6. Work With Professionals
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Consult with attorneys, accountants, and business advisors.
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An SBDC consultant can help you prepare for the process and connect you with the right resources.
Valuing a Business
To better serve our clients, Gannon University’s SBDC offers consulting services to provide deeper insights that truly impact business performance.
One area of focus is helping business owners understand the factors that influence company value—both the drivers that increase value and the risks that may decrease it. This knowledge can empower you to make informed decisions that strengthen your business and its future potential.
Please note: We do not provide formal business valuations. Instead, we offer a business valuation analysis, which includes a review of the information typically requested by a valuation expert. This process gives you a clearer picture of your company’s strengths, challenges, and opportunities for growth.