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Selling a Main Street Business in New York
Whether you’re on the fence about selling your business or just looking into your options, it’s a long and lengthy process that can often be simplified with the assistance of a business broker. Brokers handle all the nitty-gritty legwork, so you can continue running the day-to-day until the sale is complete.
New York Main Street Businesses
According to the US Small Business Administration, 99.8 percent of New York businesses are small, main-street type businesses that employ a total of 4 million people. That’s a lot of businesses, and investors interested in buying are likely to find numerous possibilities along New York streets. It takes more than just locating a decent main-street business to become an owner, though.
Valuation of the Business
One of the first steps involved in the selling process is determining the asking price. A Business Broker can help by providing an option of value.
The value is determined from several factors, including:
- The value of the business’s assets
- The strength and size of the customer base, which is extremely important for a small main-street business’s success and reputation
- Current competition of other businesses being sold in the same industry
Setting the right sale price of your main-street business is extremely important. Too high a price scares off potential investors and buyers. Too low a price means you don’t get an adequate financial reward from all the hard work you’ve put into building and running the business.
Getting Your Business in Order
When a small business is on the market, it’s closely scrutinized by potential buyers, which is why it’s important to gather necessary financial information a buyer might want to see. Be sure to take a close look at your company’s daily operations and fix any flaws that are present. Some of the areas you may want to consider evaluating include:
- Corporate books and financial statements for the last three years. Your business’s accountant can help with this review and suggest any steps you may need to take to correct issues
- Overall condition of the premises — now is the time to make repairs you’ve been putting off and update necessary equipment, if appropriate
- Ongoing claims or disputes against the business, including outstanding taxes, if any
Advertising Your New York Business for Sale
With New York small businesses being so numerous and present in such a competitive market, advertising is essential to ensure investors and eager entrepreneurs catch wind that your main-street business is for sale. Advertising your business is another reason why you should hire a Business Broker to help with the selling transaction of your business. A Business Broker knows how and where to advertise your business to reach the most qualified buyers.
Conducting Due Diligence
One of the most important parts of the entire selling process is due diligence. This is when potential buyers examine your business closely for financial history and stability. Due diligence can take place before serious negotiations begin and may stretch through the entire transaction, depending on the situation and the buyer’s needs.
Since due diligence processes might require buyers to view specific financial, legal and proprietary information about your business, your broker will ensure potential buyers that reach this stage sign a confidentiality agreement before moving forward. This protects your trade secrets and other sensitive information should the sale not continue once due diligence is underway.
During the due diligence process, you might need to provide information such as:
- Extensive financial information
- Company formation documents
- All key assets to be purchased
- Contracts with sales, suppliers, landlords, etc.
- A list of staff and current employees that includes who they are and what position they hold
- Any applicable licenses or permits
Working closely with your Business Broker, thinking carefully over each component of the selling process, and preparing adequately help ensure the best possible outcome when selling your business.
Contact a LINK NYC Business Broker today to discuss the selling of your business.