5 Tips To Help You Sell Your Home Based Small Business


Selling A Home Based Business

According to the SBA, 52% of small businesses are operating from a home based office.  If you own a home based business this high percentage rate is good news for you.  It means that owning this type of business has become a popular choice for many entrepreneurs and as a result, if you want to sell your home business, there is a market looking to buy it!

Unlike a traditional brick and mortar business, selling a home business requires a little more finesse on the part of the seller. You really need to do your due diligence and prepare the business to be sold in order to make it attractive to a potential buyer. Selling a profitable home based business can lead to a nice return for an owner so here are my tips to achieving a successful sale.

1.  Make Sure The Business Operates Like A Business

As an entrepreneur running a home business, in most cases, you don't have a boss or anyone holding you accountable.  For some people, this lack of accountability leads to sloppy operations.  It can be easy to get wrapped up in the day to day operations and let back end work slide.  The same is true for any small business, home based or not.

When you are planning to sell you need to make sure that your business is operating as a business should.  Ideally someone should be able to step in and pick up right where you left off without missing a beat and grow the business.  To prepare for a sale, make sure you can compile clear financial reports that project the financial state of your company.  Also be sure that you have all your important paperwork in one place because just like the sale of a traditional business, you'll need to present buyers with a packet of information about your company.

2.  Document As Much As You Can

Along with your financials and other company information, I would also suggest compiling some sort of procedure or operations manual.  Depending on the nature of your business this may not be a big undertaking just put something on paper that details to potential buyers how your company is operating.  Tell them information like how you are finding clients and what the process is once you have one.  Do you enter them in a database?  Then what?  Talk about accounting procedures and detail your billing process.  The idea behind a document like this is to provide a set of instructions that would help a new owner step in and take over in your absence.

3.  Consult With A Professional Business Broker Or Agent

If you are considering selling your home business, I highly recommend you consult with a professional business broker prior to listing the business for sale.  As I said earlier, selling a home business is a little more difficult than selling a traditional brick and mortar business especially if it is a one-person operation.  In a situation like this, finding a buyer that has the skill set to take over as well as the ability to run the business side of things is crucial.

Additionally, pricing a home based small business appropriately is going to take some expertise.  A professional business broker will be critical in helping you determine a fair asking price that will get your business sold in a timely manner. This is not a task you should try to take on yourself.

4.  Offer Business Purchase Financing

In addition to all I've mentioned above, also consider offering some sort of business purchase financing to buyers.  Not only is this becoming more common place among businesses that are being sold but many lending institutions are looking for it as a part of a sales agreement.  They want to see that the owner has some skin in the game and by offering to hold a portion of the note you are telling lenders that you believe the new owner has what it takes to successfully run the business.  Doing this can help the buyer secure financing through a lender and ensure that your sale makes it to closing.  

5.  Look To Your Colleagues

Because selling a home business is going to require just the right buyer, I recommend you take an active role in the sales process by not only working with a professional business broker but also by reaching out to your colleagues.  They may know someone interested in your business or if your industries are related, they may be interested in buying it themselves.  If you do discuss the opportunity with anyone, be sure to get them to sign an NDA to protect the confidentiality of your sale.

Peter Siegel, MBAAbout The Author: Peter Siegel, MBA is the Founder (of BizBen.com) & the Director Of the BizBen California Network (founded in 1994!) consisting of business buyers, owner/sellers, business brokers, agents, intermediaries, and advisors (there are over 90,000 users, and 8,000+ listings posted on BizBen.com). To join (FREE) the BizBen California Network, phone Peter Siegel direct at 925-785-3118 - get signed up for business for sale listings (Email Alerts) before they hit the market, view requests from serious business buyers - wanted notices, notices about upcoming FREE online webinars on the topic of buying and selling California small and mid-sized businesses and much more! Call 925-785-3118 to get info about small businesses for sale in your area.

Categories: BizBen Blog Contributor, Deal And Escrow Issues, How To Sell A Business, Selling A Business







  Helpful Resources To Assist In Selling And Buying California Businesses
Shalonda Chappel: Escrow & Bulk Sale Services - Southern California

Escrow services to brokers/agents, sellers, & buyers. Established 43 years. Extraordinary service. Experienced with handling difficult transactions. One stop for all your escrow needs: Bulk sales, lien searches, UCC searches, liquor license transfers, publishing & recording services. 951-808-3972.

William F. Ziprick, Attorney: Legal Services For Buyers And Sellers

Through creative problem solving, attention to detail, accessibility, & understanding that unnecessary delay is often a deal killer, I work closely with my clients and other professionals to consistently achieve a high rate of closings. Office: 909-255-8353, Cell: 509-951-7230.

Helen Yoo, New Century Escrow - Escrow Services In Southern California

New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.

Brad Steinberg, Business Broker: Laundromat Specialist

PWS is the leading laundromat broker in California. Since 1968 PWS has brokered over 2,500 laundromat sales. With over 90 employees dedicated to the coin laundry industry, PWS has 18 licensed agents, a 3 person in-house finance department, 10 service technicians and a 20 person parts department.

Diane Boudreau-Tschetter: Escrow & Bulk Sale Services - CA

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Elizabeth McGovern: Escrow Services - San Francisco Bay Area

McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.


  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews
Buyer Beware: Does A Company's Culture Effect The Sale Of A Small Business?

When purchasing a small to mid-sized CA business, there are a many items to evaluate. One area that is often overlooked is the business's office culture. Peter Siegel, MBA with BizBen discusses with business buyers the importance of understanding how the business "feels" on a day-to-day basis.

Back-Up Offers: Crucial When Buying Or Selling A California Small Business

An often overlooked aspect of selling (or buying) a small business is taking back-up offers during the entire process of selling (or buying) a business. Most sellers (or buyers) don't realize that over fifty percent of all deals/contracts fall out escrow or contract for one reason or another.

How to Sell Your Small Business: Tips For Selling Your California Business

Peter Siegel, MBA - Lead Advisor with the BizBen.com ProSell Program discusses critical steps to prepare a California small business for sale including: which documents will be needed, key advisors to have involved, pricing the business, and how to attract the right business buyers to your listing.

Why Isn't My Business Selling? 6 Great Questions To Ask Yourself For Answers

It can take months, sometimes longer to sell a small business. Here are 6 questions from Peter Siegel, MBA (Business Purchase Financing Expert, ProSell Program Advisor with BizBen) at 925-785-3118 to ask yourself to help you determine why your small to mid-sized California business isn't selling.

Need Financing To Buy A Small Business? Business Purchase Financing Details

What are actual adjusted net earnings (cash flow) of a small business being purchased with business acquisition financing? That's an important amount that lenders need to know. Peter Siegel, MBA (BizBen.com's Lead Advisor - ProBuy/ProSell Programs) reviews this concept with BizBen Blog readers.

Buy A Business Or Start From Scratch? 5 Key Differences For Business Buyers

Some buyers believe it's better to start a business from scratch rather than buy an existing enterprise. While this may be good advice in some cases, usually it's not the best strategy. Here are five tips to help a buyer make the right decision from from Peter Siegel, MBA (BizBen Director).

Should A Buyer Be Allowed To Operate A Business Before The Close Of Escrow?

Business buyers, brokers, owner/sellers all ask this question at some point. So I decided to ask some of the top Intermediaries in the California marketplace what they thought of the idea. Most of the ProIntermediaries on BizBen agreed with me on taking early possession before the close of escrow.

What Are Business Buyers Biggest Mistakes? The Pros Examine The Most Common

A business buyer in our ProBuy Program searching to buy a California business asked me to sum up what I though the biggest mistakes business buyers make when they search for and bought a small business. I asked BizBen ProIntermediaries their thoughts on the matter and received a diverse response.


Escrow Services Diane Boudreau-Tschetter
Steve Erlinger Laundromat Broker
Clothing Company For Sale
Julieanna Wakileh Preschool Broker
Facebook
Twitter
Linkedin
Vlogs and Podcasts
BizBen ProBuy Program
California Educational Events Buying And Selling Businesses
Advertise On BizBen
BizBen ProSell Program
Instant Email Alerts On BizBen

BizBen - Where California Deals Get Done! 888-212-4747
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2020, All Rights Reserved




500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
Selling Your Business To One Of Your Employees - A Good Idea? Pros And C...
Read More News
Confidentiality: Why Keeping A Deal Quiet Is Important To Sellers And Bu...
Read More News