Sell a Business in Chattanooga, TN
There are just under half a million people living in the Chattanooga area. If you’re thinking about selling your business in such a large market like this one, there are a few important things to consider.
In this article, we’ll go over what the process of selling a business in a huge market looks like as well as dive into some key factors that are crucial to a successful sale.
What Selling in a Large Market Looks Like
When you go to sell your business in a place like Chattanooga, there’s a strong likelihood that there will be other businesses similar to yours also for sale. In the selling process, not only will buyers be able to see your business in a seller’s database, but they’ll also be able to compare your business to others like it.
For example, say a buyer is looking for a service company and you happen to own a service company that you’ve poured your blood, sweat, and tears into building over many years. The minute you bring your business to market with the help of a professional business broker, the buyer will be able to see your confidential listing up against other service companies that are similar to it. Whether a business buyer has an enormous amount of experience in service, manufacturing, distribution, or any other kind of industry, they will want to (and will be able to) compare different businesses for sale to hopefully find the one that best aligns with their needs.
3 Main Things To Consider When Selling in a Large Market
There are a few key things that you should be aware of when selling a business in such a large market and when there are other businesses comparable to yours for sale. Below are a few top considerations to keep in mind while you navigate this process.
When it comes to selling your business in a large and competitive market, maintaining confidentiality is critical. If you have a strategy in mind for selling your business, does that plan include a way to protect confidentiality? Or would your plan make it easy for your best employee, vendor, or even competitor to uncover that you’re selling? It can be incredibly damaging to your business for the wrong people at the wrong time to figure out that you are planning to sell—especially your competitors. In fact, part of your business’ value is based on it being sold in a confidential manner. That’s why partnering with business brokers that have systems in place to maintain confidentiality and who understand how to disclose information strategically to the right people at the right time is so essential.
At Sigma Mergers & Acquisitions, we are actually looking into AI software to protect this confidentiality in addition to standard practices we use like non-disclosures. Our goal is to ensure that we keep the wrong people from accessing information about your business while simultaneously allowing the right people to access only what is necessary at that point in time.
The second key consideration is valuation. When you’re in a large market that has other businesses similar to yours that are also for sale, it’s incredibly important that your business valuation be based on facts. Facts are what the buyers care about and what they’ll be assessing your business by. Not only should your value take things like profitability into account, but also things like your software stack and the intangible value your business has over its competitors. Buyers will also be interested in things like your business’ balance sheet, equity, and assets.
There will be a number of both tangible and intangible factors that play into your fact-based valuation. Making sure your valuation is backed up by evidence can make all the difference when buyers compare your business to others. If you’re interested in selling your business in the Chattanooga area, you can request a free, confidential valuation here.
The third and final thing we’re going to look at that’s important to think about when selling a business in the Chattanooga area is having your processes in place. We are currently in the information age—meaning buyers expect to have lots of information at their disposal when buying a business. If your systems and processes are disorganized and you can’t provide buyers with the right information, it’s going to be difficult to sell. Now you may be thinking to yourself: I’ve bootstrapped my business and just kind of duct taped it together to get it going. I have a good business today but I don’t have all the data from the past. The hard truth is that, when going to market, a certain amount of data is needed. For example, if a business buyer is going to get an SBA loan, these banks now require a certain amount of financial data (balance sheets, profit and loss statements, tax returns, etc.).
The good news is there are professionals that are accustomed to working with business owners that can guide you through this process so that you can show buyers that you are serious about selling. One of things that the right business broker can help you with is a fact-based valuation. Another is using actual data and reports to determine how your business is better than others. And it’s not like any business is 100% without issue or problems—businesses are like people, after all. But the right partner can help locate and focus in on the positives of your business by pulling the data, looking at the financials, assessing your operations, and more. Successful business brokers understand how to evaluate both the tangible and intangible processes that allow your business to succeed.
How Sigma Mergers & Acquisitions Can Help You Sell Your Business
At Sigma, we are passionate about getting you the greatest value for your business. We understand that in this information age, accessing and understanding the information about your business is crucial. That’s why we work with your CPA, bookkeeper, and others to uncover the reports we need so that together we can understand your business better. Our process helps you get the most value out of your business so that you can access the equity that is rightfully yours and won’t be robbed because you didn’t have an effective plan in place to demonstrate the value of your company. Contact us today for a free business valuation and we will help walk you through the process of selling your business even in a large and competitive market.