September 26, 2020  
 
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Selling a Business

 

Selling a Horses and Equines Business

The sale of a horses and equines business can be a difficult and trying process. But with a few tips, you can keep your shirt and your sanity in the sale of your business.

Personal and professional concerns surround the sale of a horses and equines business. In addition to the personal enjoyment you received from the business, you probably have concerns about what will happen to the people who made your horses and equines business a success.
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Qualified buyers are constantly looking for attractive horses and equines businesses. Like always, unprofitable and poorly positioned businesses struggle to find buyers while sellers who have invested time and effort to prepare their sale are being rewarded in the marketplace.

Maintaining Objectivity

Objectivity is a rare commodity in a business sale. You have invested yourself in making your horses and equines business the success it is today, but in the eyes of prospective buyers, your operation is only worth fair market value. It is difficult for many owners to accept the cold, hard facts about their company's worth, but objectivity is the name of the game in a successful horses and equines business sale. Consider recruiting a team of objective professionals to help manage your expectations as you prepare and negotiate the sale of your business.

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 horses and equines businesses. As a result, buyers expect sellers to finance a significant portion of the sale. It's common for sellers to finance as much as 70% of the purchase price with a payoff period of four or five years, sometimes in the form of a balloon payment at the end of the repayment period.

Advantages of Hiring a Broker

Brokers give horses and equines business sellers distinct advantages in the marketplace. First, business brokers are in tune with the realities of the market and are skilled at helping owners make their businesses attractive to premium buyers. Even more, the best brokers have a track of record of discreetly identifying likely buyers and contacting them on your behalf. Typical brokerage rates (a.k.a. success fees) run 10% of the final price - an expense that is usually recouped through a higher sales price and less time on the market.

More Info on Business Transitions and Related Articles

Ready to learn more? You may find these additional resources to be of interest.

Marketing a Horses and Equines Business

Family Business Exit Plans

How Much Is My Business Worth?

Pre-Exit Employee Incentive Programs


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