08 Sep, 2017
Best Small Business For Sale By Owner
Best small business for sale by owner
There are many existing businesses today that are being put up for sale by their owners. Some prefer the services offered by a business broker. Hiring a business broker can save you a lot of time and effort. A business broker is no different than a realtor in the housing industry; they are paid by commission for handling a business transaction. Sellers usually gain a certain advantage in best small business for sale by owner also known as FSBO as sort of business shorthand but buyers can get even more if they know what to look for in buying a FSBO business.
Advantages of Buying Businesses for Sale by Owner
If you are interested to buy a business for sale by owner, the following are the benefits you can expect based on the different aspects of FSBO:
Regarding the selling price - FSBO cases generally arise when the seller wants to avoid paying commissions to a business broker, and there is usually a wiggle room in the negotiation phase. Note that actual market value already has a sales commission. Take this for example - ABC Company is offered for sale at $250,000 with a 10 percent commission for the business broker. As such, the seller only sees $225,000 from that sale. While it is unlikely for the buyer to convince the seller to give in at that lowered price, he might actually ask the seller to split the difference. In the end, the buyer may just get lucky with a $12,500 savings, which is not bad at all.
Regarding the equipment - A business for sale by owner often includes equipment and other important tools necessary for operation. It can be a big hassle for the buyer to spend additional money on replacing computers, printers, fixtures, and furniture. Since these items were purchased by the business owner probably at the start of the business years ago, the buyer can ask for lower residual value compared to the rates a best small business for sale by owner broker might indicate. In an FSBO transaction, the seller will most likely include all equipment in the deal, while the broker will insist that the buyer should pay for the fair-market price of every item included in a business for sale.
Regarding the inventory - FSBO businesses present buyers an best small business for sale by owner to acquire existing equipment and items in inventory that are far below their current resale value while the owner, meanwhile, is just eager to dispose of them as soon as possible for retirement purposes.
Regarding expertise - Business owners have complete knowledge of their company, their clients, and the industry. When they decide to sell their business, they are oftentimes eager to stay and help the buyer learn the process and management of the company. Do not be afraid to ask for advice because there are people who actually love to give it. Of course, who else is a better person to ask regarding an FSBO business than the seller himself, right? As the buyer, the sellers' guidance and advice can truly help you in the process of best small business for sale by owner.
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