February 18, 2020  
 
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Selling a Business

 

Selling an Insulation Removal Business

Think insulation removal business sales have dwindled to a standstill? Think again. There aren't any guarantees, but if you adhere to fundamental business sale concepts, you can likely get a good price for your business.

Most business sellers are interested in disposing of their businesses as quickly as possible. But that's not how an insulation removal business sale works.
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If your exit strategy involves selling an insulation removal business in this environment, sellers need to make a strong case for buyers to purchase at or near the asking price.

Seller Financing

The shortage in today's marketplace isn't interested buyers -- it's capital. Financial institutions have tightened up their lending policies, making it difficult for inexperienced and undercapitalized entrepreneurs to buy insulation removal 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.

Sale Costs

The calculation of your asking price should include a buffer to cover the expense of the sale process. Good brokerage takes a 10% success fee off the top of the final sale price. Professional consultations can also represent a significant expense during the course of an insulation removal business sale. If you need to compensate employees to assist with the sale, their services should also be considered.

Average Preparation Time

Preparing an insulation removal business sale takes time. 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. Next, the business will need to be documented in professional financial statements and manuals that facilitate the ownership transition. At a minimum, plan on spending six months preparing your insulation removal business for the marketplace. A more likely scenario is that it will take more than a year to create the conditions necessary to receive the maximum sale price.

More Info on Business Transitions and Related Articles

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

Marketing an Insulation Removal Business

Selling to Competitors

Selling Part of a Business

Role of Location In Selling a Business


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What challenges have you experienced in selling an insulation removal 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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