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Selling a Contractors' Referral and Information Services Business

No one said selling your business in a depressed economy would be easy. But selling your contractors' referral and information services business doesn't have to be as daunting as it sounds.

Personal and professional concerns surround the sale of a contractors' referral and information services business. In our experience, a common owner concern is how the sale will affect customers and employees.

Many business owners don't know that contractors' referral and information services businesses are still a hot commodity, to the extent that sellers have properly prepared them for the marketplace.

Signs You're in Over Your Head

Many contractors' referral and information services business are tempted to save brokerage fees by selling their businesses on their own. 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. Lack of buyer enthusiasm or persistence indicates that something is wrong. Hire a broker and conduct a professional appraisal ASAP.

Seller Financing

Capital is hard to come by these days. Financial institutions have tightened up their lending policies, making it difficult for inexperienced and undercapitalized entrepreneurs to buy contractors' referral and information services businesses. As a result, buyers expect sellers to finance a significant portion of the sale. Although 100% seller financing isn't recommended, sellers are financing up to 70% of the sale price to close deals.

Setting the Stage

Effective contractors' referral and information services business preparation focuses on communicating value to prospective buyers. Professional business brokers understand buyers and know how to properly communicate a contractors' referral and information services business to the marketplace. Financial statements, appraisals, operations manuals and other documents lay the foundation for your contractors' referral and information services business sale, creating incentives for prospects to agree to a higher asking price.

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