Fred S. August , 5th Edition. Out there somewhere is a buyer looking to buy a business like yours -- so if you're ready to sell, make sure that you protect your interests and maximize your profit with The Complete Guide to Selling a Business. It covers:. Packed with practical advice and invaluable insights—and dozens of key legal forms—this book shows you how to:.
This edition edition is completely updated with the latest tax considerations, and now provides more advice on marketing the sale of your business. Attorney Fred Steingold practiced law for over 40 years in Ann Arbor Michigan, where he was well known and highly regarded by the local legal community. Fred passed away in To sell your business on optimal terms, you must attend to many practical and financial details. You must, for example, determine a realistic price, prepare your business for a sale, find the right buyer, and negotiate a sales agreement.
Still, it helps to have the big picture so that you can understand how the pieces fit together. This chapter will provide that big picture and give you a context for the individual steps. These and other key legal issues are introduced in Chapter 3. For example, in , when Andrew Carnegie offered to sell his huge steel operations to J.
Morgan said yes and the sale was made. Just from talking to others in your industry or from articles you read in trade publications, you may already have a pretty good ballpark idea of what a business like yours is worth. If you set your price too high, you may be disappointed to find that potential buyers are scared off, with the result that word gets around that your enterprise is of little interest. By the same token, if you set the price too low, a savvy buyer may try to snap up your business at your bargain basement discount.
Pricing a business is both an art and a science. If you were planning to sell your car, you would probably do a number of things to make it more appealing to top-dollar buyers: tune the engine, tap out the dents, replace the worn floor mats, give the car a good wash, and wax it. This will typically mean taking sensible steps to reduce expenses while increasing gross and net income. You may, for example, need to address an environmental clean-up issue, get rid of outdated inventory, or renew your lease assuming, of course, you occupy a good location on favorable terms. These topics and more are covered in Chapter 7.
Another potent sales tool—one worth thinking about creatively and developing carefully—is a business plan that looks ahead for the next three or five years. The plan you create should be a credible and convincing document that helps the buyer envision future growth and profits. Think of your plan as a roadmap showing the buyer how to actually take your current business into new and exciting profits territory. Your business plan might describe in detail a strategy for expanding into the servicing of hot tubs and backyard spas, using the same work crew and trucks.
It can also be a huge help in convincing a buyer not to find a reason to withdraw from the transaction. Think of it this way: Since no business is sold in a day, or even a week, there will be plenty of time for a nervous buyer to develop cold feet and seek to back out of the deal. If your plan does nothing more than counter this natural tendency, it will more than pay for the time and energy you invest in creating it.
Or if your business is well known and popular—and especially if Lady Luck has taken a chair in a corner of your office—word that your business is for sale may be enough to bring prospective buyers to your doorstep. This often includes putting ads in newspapers, in trade publications, and on websites that list businesses for sale. In addition, you may want to consider engaging a business broker to help locate an additional pool of potential buyers—although you will, of course, have to pay a substantial commission if you go that route.
In some instances, discretion, if not secrecy, is a better approach—especially if you fear that premature disclosure of your plans might cause key employees to defect, customers to look elsewhere, or suppliers to tighten your credit. In fact, if your situation dictates keeping your intentions mum, your main concern may be to avoid prematurely spreading word of your plans.
And in a world where competitors are always watching, sometimes doing this can be harder than you might imagine. A prospective buyer may express interest in your business, but rarely will you be able to emulate Andrew Carnegie and strike a deal instantly. For one thing, the buyer will inevitably want to dig deeper into your business and learn more about nitty-gritty operating issues.
Obviously, it will take time to complete these other steps—such as designing a prudent security agreement in case the buyer later defaults. In addition, there will be many other legal and practical details to be worked out, including the following:. Will you be selling your entire business entity your partnership, corporation, or LLC , or just its assets? Will the buyer pay full cash up front relatively rare?
If not, how big a down payment will you insist on? And what payment terms and interest rate will the buyer commit to? If the seller fails to make a required payment, what legal recourse will you have to unwind the deal or recover your money from other sources? What, if any, warranties will you make about the condition of the business or its assets? Obtaining a sense of direction is more than half of the battle when it comes to reselling.
Direction is what will transform you form a garbage man to a sophisticated online entrepreneur. Some of the best flips are the items that you know the most about. If you are a gamer, flip video games, if you collect watches flip watches. Doing something that you really enjoy will only help you as a reseller. Sourcing items is fancy way of finding things to resell online. Sourcing can be done in multiple ways, there is no right or wrong way to. When you source items for your online resale business theses are the places I would suggest to go after that will almost guarantee you items to flip.
Saturday Morning is a gold mine. Garage sales are the true bread and butter of reselling online. Typically they only happen in parts of the spring and fall, but happen every weekend during the summer. Rain or shine you are typically able to find a garage sale on a summer Saturday morning.
I would highly suggest you do the same if you are interested in making more money as a reseller. Similar to garage sales, flea markets should be a staple.
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In New Jersey they have a few very large ones that happen every weekend. Other states have the same. A good flea market will have mom and pop sellers who host their version of a garage sale at a flea market. The bad flea markets are the ones with more businesses or traditional antique sellers.
Your job is to beat those people by finding the good stuff fast and easy. Thrift stores are the best for reselling. If you like to flip clothing there is nothing better than thrift stores. The big block thrift stores, Goodwill, Salvation army, Savers, Etc. These places can be great. However, I would suggest checking all of the smaller and more local thrift stores in your area.
Sparking up a relationship with an employee would be a great idea too. You will hit a point as a reseller where you want people to start coming to you.
The Complete Guide To Reselling | Starting A Resale Business
This is where local ads on Facebook marketplace, Craigslist, and other similar sites come in handy big time. As a reseller you have to educate yourself on what works. If you explore the idea of local ads, be ready to dive nose deep into a large experimental process for your resale operation. You have to understand your niche.
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Reselling is a difficult thing if you have no sense of direction as a rookie. Being an incredible reseller takes time.
I would highly suggest to define a niche, master it and then move to others. The most well known resellers and the American pickers. IF you watch the show they feel comfortable throwing a number on just about anything without doing prior research. You will get to that point as well so long as you take it serious. Work small, and then get big.
Start off buying things you find interesting. It will make the whole process much more simple. When you buy something you need to have a rough estimate on your margin and understand the whole fee analysis before you make the purchase. With any business, you need to understand your margin. Reselling online is typically a very profitable thing because you will always pass up deals that are too slim of margin. This is how you can quickly calculate your margin.
The fees involving marketplaces will crush your margin in most examples. This is why we created a marketplace free of fees. In order to sell online at high volumes you need a database of sold items.
How to Sell on Amazon: The Ultimate (Step by Step) Beginner’s Guide
Luckily eBay has this feature in its sold listings section, Amazon has a similar feature in its app. Amazon allows you to see available listings and will show you where they think you should price your item to sell. Taking a look at the past data will give you a clear idea of the going rate where the item sells, and how quickly it will take to sell. These two metrics will help you identify a good flip and a bad one. It takes guts to be a reseller. Sometimes you will run into a situation where there is not prior data for the item you are trying to sell.
In this scenario, you need to use your judgement and utilize past experiences to make that call. Flipping an item online is not always easy. When I spent my time as a reseller I wished that there was something made specifically for reselling. I wanted something that was easy to use, intuitive, but allowed me to feel empowered as a business owner.
The Complete Guide: How to Sell Your Business (Introduction)
There are many times where an online marketplace kills your profit due to fees when you sell online. You will find yourself passing on items left and right because you are dollar short of what you feel you can pay. When we set out to create our own consumer-to-consumer C2C marketplace we wanted to build it for the modern entrepreneur. Ecommerce and selling online is difficult when you think about the fees associated with starting up an eBay or Amazon marketplace business.
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Forra has zero fees. With zero fees, suddenly selling an item becomes more feasible when the only overhead present is shipping. Where can you buy items with cryptocurrency? Forra is the one of the first options for people to use cryptocurrency as, well, an actual currency. With Ethereum mostly being used as tradable investment like a stock , Forra aims to bring new functional use to the cryptocurrency. From a sellers perspective, users can now obtain cryptocurrency by directly selling a physical asset.
For those not ready wanting cash, selling a personal belonging can offer a seller the opportunity to get into cryptocurrency without giving up liquid assets. Instead of using cash to buy Ethereum on an exchange, sell that golf bag you never use and get into cryptocurrency. After the —17 bull market got the world talking about cryptocurrency, we believe that Forra will be the next step to bring even more of the general public into the cryptocurrency space.
We want to establish a strong connection between digital currencies and physical assets. In order for cryptocurrency to be adopted on a widespread scale it must be used as an actual currency. By having the ability to purchase an item using Ethereum, Forra is able to extend the transactional efficiencies of Ethereum to the masses in a safe reliable fashion. Scared to buy cryptocurrency on an exchange?
Sell something on Forra. Want to use your digital assets to buy a vintage Casio G-Shock? Buy it on Forra. Forra is a low risk and easy way to introduce people to cryptocurrency. We are constantly looking for new sellers. If you would like to sell on Forra Sign up here. Blockchain technology is going to help online sellers of every kind.
As a former online seller turned blockchain enthusiast I see how the two can work hand and hand in the future. Blockchain technology will revolutionize the way online business works for many reasons. I want to only focus on two.
Beginners Guide to Selling on Amazon
The way trade works in the future will inevitably be done through some type of blockchain experience. Blockchain technology ultimately has the best user experience because it cuts out all middle men in the transaction. For more information about blockchain and ecommerce you can view this blog post. We think that reselling items online is the tip of the iceberg for our platform. We want to give back to the entire community of people who sell online.
We are the cheapest marketplace for selling your item online. The future will be filled with other ways to utilize and avoid excess fees. People will always be looking and promoting the products with the best user experience. In a marketplace you want to focus on getting as much money for your item as possible.