November 12, 2019  
 
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Selling a Labels and Tags Business

Forget about what you read in the paper -- labels and tags businesses are being sold everyday and the business-for-sale market is poised for even greater growth in the months ahead.

Most business sellers are interested in disposing of their businesses as quickly as possible. But that's not how a labels and tags business sale works.
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Does that mean selling your labels and tags business will be a piece of cake? No -- but you might be surprised to learn that the labels and tags businesses that are selling these days are finding success though simple, common sense selling strategies.

Average Preparation Time

There are no effective shortcuts for selling a labels and tags business. Since buyers prefer to see evidence of future cash flow, you'll want to to strategically lock in cash flows and increase profits before you list the business. You'll also need to create financial reports, operations manuals, and other documents to create the perception of a turnkey labels and tags business operation. Since all of this takes time and effort, a labels and tags business can rarely be ready for the marketplace in less than six months. If you can afford to wait, we recommend investing a few years in improving your business's financial position before you put it on the market.

Signs You're in Over Your Head

It's not uncommon for the owners of small labels and tags businesses to adopt a go-it-alone sale strategy. Plenty of owners sell their labels and tags businesses unassisted. Although there are exceptions, solo sales typically take longer and are less productive than brokered sales. As a rule, no business should sit on the market for more than six months without attracting the interest of at least a handful of qualified buyers. Likewise, if buyers seem to express interest but quickly exit when you quote the asking price, it's a sign that your labels and tags business is priced out of the market. Hire a broker and conduct a professional appraisal ASAP.

Seller Financing

Capital is hard to come by these days. Banks and other lending institutions aren't eager to lend to unproven and undercapitalized labels and tags business buyers regardless of the business's potential. Rather than abandon their plans entirely, many buyers are pursuing finance concessions from sellers. Although 100% seller financing isn't recommended, sellers are financing up to 70% of the sale price to close deals.

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Given your interest in exit planning and in labels and tags businesses, you might find these additional resources to be of interest.

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What challenges have you experienced in selling a labels and tags business or are you just getting started? If you have questions or advice to share, we'd love to hear from you!


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