There’s no one-size-fits-all answer to how long it will take to sell your Dallas business, but typically most sales can take anywhere from 9 to 14 months from start to finish. Many factors play a role in the length of the sale cycle, including:

• The complexity and size of the business. The sale process for larger, more complex businesses typically involves a longer timeline to finalize the deal.
• Market conditions. The basics of economics apply to these sales, the same as any other sale. Supply of qualified buyers and financing, as well as demand for businesses like yours, will play a large role in how long it takes to find a buyer and push the process through.
• Valuation. Setting an attractive, reasonable price can help if you want a quick sale.
• Regulatory and legal requirements. If your industry is heavily regulated, it will take longer to gather the necessary documents and validate compliance.
• Your preparedness. One of the best things you can do to shorten the sales cycle is to get all your ducks in a row, with all your documents organized and ready to go.

Everyone wants their big transactions to be as smooth and painless as possible. Here are some tips to make sure that the sale of your Dallas business goes off without a hitch:

• Get your documents in order. Get your financial documents, legal documents, and contracts in order. Consider putting them into an organized, easy-to-follow package to help make your buyer’s decision easier.
• Set a realistic price. Don’t undercut your value, Try to find a medium between setting a reasonable price without undercutting your value.
• Market aggressively. Get your offering in front of as many eligible buyers as possible so you have your pick of the litter. A proficient business broker (like the team at IBEX) can manage this for you, allowing you to concentrate on preparing for the sale.
• Make a transition plan. Strategize how you will hand off operations, employees, and customers to the buyer.
• Hire a professional broker. A good business broker knows the steps to selling a business and will take many of them off your plate, executing them with professionalism and expertise.

The short answer is — a lot. Selling a business is a big transaction with a lot of moving pieces. A brief, yet by no means exhaustive, list of factors to consider includes:

• Timing: Is this the right time to sell? Is the business financially healthy enough, the market robust enough? Are you prepared to sell and ready to exit?
• Confidentiality: How will you make sure sensitive information doesn’t get released to the public in a way that will damage the business — including, possibly, the fact that the business is for sale at all?
• Taxation and legal implications: Talk to your legal and tax professionals to avoid any unwanted surprises.
• Employer and customer transition.  How will you hand off your employees and customer relationships to the buyer so that the buyer gets what they are paying for?
• Due diligence: What due diligence will the buyer need to do, and how can you help that process?
• Negotiations: What are you willing to concede? What is non-negotiable?

There isn’t a “selling season” for Dallas businesses or anything, and it may not always be obvious what the best time to sell is. In general, though, it may be the right time to sell your business if:

• You want out. If you’re ready to be done with the business and retire or move on to other ventures, that’s often a good enough reason to at least consider selling.
• The business is in good financial shape. If your business has been doing well on paper, it’s going to be attractive to buyers and command a higher price.
• Your industry is booming. If signs point to optimism in your industry, it will also be an attractive prospect to business buyers.
• Businesses like yours are in high demand. If there are lots of eager buyers out there for businesses like yours, the added demand will put upward pressure on your offers.
• It’s a good tax decision. Consult with your tax advisor — now might be a good time to sell from a tax standpoint.

It’s normal to want to get your business transaction in the rearview mirror. While you don’t want to rush the process so much that you make mistakes, there are things you can do to make the transaction go as quickly as possible, with no delays. These include:

• Get organized. The more documents and details you have readily in hand in an easy-to-consume format, the quicker the process will go.
• Price it right. Buyers will jump at a fair price. Drastically overpricing your listing is a surefire way to make sure your business sits on the market forever.
• Go all-in with marketing. Use online, offline, and personal networking channels to get your business listing in front of as many interested buyers as possible. With just a couple of emails and calls, IBEX can get your business in front of hundreds of buyers.
• Pick your buyer carefully. Don’t just be tempted by a high offer. Make sure the buyer is qualified, has financing available, and is generally likely to close.
• Be flexible. Cooperate with due diligence and have in mind what concessions you are willing to make in negotiation so the process doesn’t drag on and on.
• Hire a business broker. An experienced business broker can significantly speed up your exit strategy from the business.

Businesses are all about documentation, so there’s a lot you need to pull together in order to sell your business. Start gathering:

• • Financial documents, preferably three to five years’ worth of profit-and-loss statements, cash flow statements, breakdowns of expenses, tax returns, balance sheets, accounts receivable and payable reports, budget and financial projections, and bank statements.
  • Legal documents, such as articles of incorporation, contracts and agreements, intellectual property documentation, business licenses, permits, employee contracts and NDAs, and documentation of any past or pending litigation.
  • Operational documents, such as organizational charts, employee handbooks, asset and equipment lists, inventory lists, HR policies, vendor lists, customer lists, and SOPs.

• Documentations of real estate leases or ownership.

• Insurance policy statements.

• Guarantees and warranties.

• Supplier and customer contracts.

The question that’s on every seller’s mind. Of course, every business is different, but in general the value of your business could be calculated in several ways, including:

• The sale price of comparable businesses that have sold recently (adjusted for any differences between the two companies).
• Asset-based valuation, based on the book value of any assets and equipment changing hands with the business.
• Earnings multiple. In most cases, businesses are valued based on a multiple of an earnings metric. Different industries command different multiples, but the basic idea is that the business is worth some multiple of its earnings. Examples of the metrics that might be multiplied include the price-to-earnings (P/E) ratio; gross revenue; seller’s discretionary earnings (SDE); and earnings before interest, taxes, depreciation, and amortization (EBITDA).

As a seller, you’re certainly looking to secure the highest price you can for your business. Many factors influencing the price you can command are under your control. Here are some ways to maximize the value of your business listing:

• Increase the financial performance. Put in extra effort to increase revenue, decrease expenses, and organize your finances to present your business in the best light possible.
• Optimize operations. Knock your buyers out with a well-run business.
• Make a transition plan. Show potential buyers they can take the handoff with your employees and customers without missing a beat.
• Reduce compliance and legal risk. Settle any outstanding legal issues and update validation of regulatory compliance so there’s no question your buyers are stepping into a good situation.
• Safeguard your intellectual property. Create or update patents, copyrights, and trademarks so the characteristics of your business are conveyable assets to entice buyers.
• Offer seller financing. If you don’t have an immediate need for cash, sellers usually offer a higher price when you agree to carry back debt.
• Open up new revenue streams. Diversify your business income so buyers can see the potential for increased revenue.
• Hire a business broker. Business brokers can give you expert advice tailored to your business, strategize your listing, and leverage relationships to get you the highest possible offer.

Dallas has a robust business community, replete with experienced business buyers who have access to money and financing. The trick is to make as many of them as possible aware of the opportunity to buy your business. Ways to do that include:

• Get the help of a business broker. Business brokers are in the business of connecting businesses for sale to buyers who want them. They do this through marketing, networking, and making your listing as attractive as possible.
• Make an online listing. List your business for sale on major marketplaces. Your broker can help you with this.
• Use your network. Let your network of other business owners know that your business is for sale. Attorneys and accountants are especially good at connecting business buyers to business sellers because of their clientele.
• Direct marketing. Make or buy a list of qualified prospects and pitch the opportunity to them directly.
• Local organizations. Spread the word at the Chamber of Commerce, business-buyer organizations, and other organizations.

Usually when a business is sold, a significant amount of cash changes hands. So what happens to it? Where does it all go? The answer to that question can depend a lot on the structure of the deal. Here are some possibilities:

• Lump-sum payment. In the easiest scenario, all the cash proceeds from the sale get handed over to you (the seller) at once when the deal closes.
• Settlement of debts and liabilities. Before cash is handed over to you, the first money in may need to go to settle any outstanding loans, debts, or payables on the company’s books so the business gets handed over clear of any encumbrances.
• Seller financing. In some cases, you as the seller may agree to finance part of the deal and collect payments on new debt issued by you against your ownership interest in the business.
• Working capital adjustment. The deal may specify that the business needs to be handed over with a certain amount of working capital in the coffers. If the working capital balance is either too high or too low, there may need to be an additional cash payment by either the buyer or the seller to meet the working capital requirement.
• Earn-outs. Some deals stipulate that instead of all the cash being handed over at once, the owner will get a series of subsequent payments based on the performance of the business, incentivizing the seller to hand over a healthy business.

How long it takes to arrange financing can depend on a number of factors, including the type of financing and the qualifications of the buyer. It can take anywhere from a few weeks to a few months. If you need a quick sale, you may not want to accept the highest offer if it is contingent on financing that you know will be hard to get — and certainly not if you have reason to doubt the qualifications of the buyer. If you don’t need the cash right away, one of the easiest ways to circumvent a long financing period is if you offer seller financing (which is also a way to get a higher offer.)

A business broker can help make your sale not only easier but also more profitable. A business broker can help you achieve:

• A higher valuation. The experience, expertise, and professional network of a business broker can enable you to position your business effectively, craft the best listing, and get the listing in front of the most motivated and qualified buyers.
• Confidentiality. A business broker can present your business to buyers without exposing your plans to the public. You cannot.
• An easier transaction. The business broker and his/her team can take much of the hard work of the transaction off the table, so you can focus on your final act with the business and your next steps.
• Less confusion. Every decision in the sale of a business can be very consequential. A business broker is on your side, a trusted advisor to give you expert advice to make the right decision at every stage of the transaction.

Our fees are determined based on the specific scope of work we undertake on your behalf. Our commission rates typically span a range between 2% and 8%. We always strive to make sure that the value we bring to your transaction — in terms of extra cash in your pocket as well as time saved and mistakes avoided — more than exceeds the investment in our services. Schedule a free consultation with us and we’ll listen to some details about your business so we can give you an accurate quote.

If you don’t want sensitive business details to become public, there are several ways you can preserve confidentiality while your business is in the process of being sold, including:

• Use non-disclosure agreements (NDAs).
• List the business anonymously – only describe the industry and characteristics.
• Screen buyers carefully — don’t just accept an NDA from anyone, verify aspects of their trustworthiness.
• Hire a business broker to act as an intermediary.

Most business sales are a taxable event on a number of levels. Speak to your tax advisor to understand what taxes your sale might incur. Possibilities in Dallas include:

• Federal Income Tax

• Capital Gains Tax

• State Sales Tax (Texas has no state income tax, but if assets or equipment change hands, Texas sales tax may apply)

• Franchise Tax, aka margin tax (revenue-based)

• Property Tax (if the sale includes real estate)

• Transfer Taxes (Texas has no state transfer tax, but there may be local transfer taxes)

Classic question, and one with no easy answer. Your tax advisor will have more details about what taxes you can expect to be liable for with your specific transaction. See above for some of the taxes you may be liable for, but as always, consult the advice of a tax professional.