Exit Planning Techniques By Market
Selling a Financial Guaranty and Life Insurance Business
Don't believe anyone who tells you it's easy to sell a financial guaranty and life insurance business. A lot of things need to happen before you can successfully exit your business. But with a few tips, you can keep your shirt and your sanity in the sale of your business.
Business-for-sale markets are less dependent on economic conditions than most sellers think they are.
However, serious buyers also understand the value of a good financial guaranty and life insurance business. So for financial guaranty and life insurance business sellers, today's market is all about convincing buyers that the numbers make their companies worth the asking price.
Sale Costs
In a financial guaranty and life insurance business sale, pricing is based on a number of factors, including the costs incurred during the sale. Good brokerage takes a 10% success fee off the top of the final sale price. Attorneys, accountants and appraisers work for a flat fee that can range from hundreds to thousands of dollars. Furthermore, your time has value, so you may need to include a personal compensation consideration in your expense estimates.
Pre-Sale Checklist
The upfront time you investment in the sale of your financial guaranty and life insurance business will pay big dividends at closing. The first item on your checklist should be a reality check -- if you plan to sell your business for top dollar in just a few short months, you need to adjust your expectations%However, your first priority should be to set realistic expectations for the selling process and its eventual outcome. Once your expectations are in the ballpark, you can move on to making your business presentable to prospective buyers.
How to Skillfully Address Buyer Concerns
Buyers can present challenges, especially during the due diligence stage. The questions financial guaranty and life insurance business ask during due diligence are designed to alleviate their concerns about the business and should be promptly addressed by the seller. When concerns arise, it's helpful to base your responses on facts and data. If you don't know the answer to a question, there's no shame in admitting ignorance and telling the buyer you'll look into it. However, at some point due diligence has to end and the sale must proceed to closing. Consult with your broker to determine when it's time to draw the line and push the buyer toward a final commitment.
Share this article
Additional Resources for Entrepreneurs