How to Offer Incentives to Sell Your Business Fast

Every business owner who wants to sell a business hopes to do it fast, smoothly and lucratively. However, the reality can be something very different. Sometimes, tough times can compel a seller to let their investment of many years go. At times, a person just wants to move away to another state, province or nation and start a new life. Even family emergencies, desire to venture into a new industry or just to raise capital for another project can be valid reasons to want to sell a company fast and easily.

While many sellers actually think it’s quite easy to do so, the reality can be mortifying. It could take months or years, attract the wrong kind of buyers or face other problems that don’t have anything to do with the owner. At such a time it pays to be innovative; come up with better strategies and incentives to persuade willing business buyers to check your investment out.

Even so, it’s important as a person to be realistic and agree that selling a company within a few days or weeks might never happen. Research actually shows that only a few businesses (around 10% of them) find acquirers between four weeks and twelve weeks. The majority actually take between 28 weeks and 36 weeks.

Related. How Long Does it Take to Sell a Business

Don't ignore incentives

A significant number of business sellers think offering incentives to would be buyers is akin to hiding some weakness or problem with the company. However, they help to make the deal better and worth checking out. Inducements work as magnets attracting potential clients to approach and pay attention to the deal. The way you do this can actually come out as a favor and not much of an enticement to purchase.

Perks hard to say no to

One way of doing this is actually offering unique perks that any willing business buyer would find hard to say no to. Such perks are actually made with the acquirer in mind with a view to ensuring that once they take over operations can either begin right away or commence seamlessly as before, if not better. For instance, a start-up printing factory owner can offer a would-be buyer a fully paid shipment of raw materials. Also, the seller can allow the buyer to have access to all the regular consumers, business contacts available and new orders without any charge. Such incentives in perks would definitely make any willing taker pay close attention to the deal before them.

Extras for high risk investment

Most business owners see their investment the same way even if the company has been around for decades. They’ve always made a profit and gotten by without a problem. However, the company might actually be a risky investment for a new buyer for all manner of reasons, such as weak economy, changing customer tastes and market flooding. In case you realize your business is a high risk one you might want to offer unique incentives that give confidence to an interested party.

For example, rather than just sell and leave the company you could provide the party with a rent-to-own ownership plan. As the seller you could request the new owner to pay for rent only after enjoying all the income from business activities for a specific period of time with a buy-out clause.

As a result, the potential acquirer is offered a chance to analyses the performance of the company, its potential, what it needs to grow better, among others before fully committing to buy the company entirely. The idea is ensuring that as the seller you receive some monetary compensation from the investment, such as a percentage of monthly sales. Due to the high risk nature of the business the new buyer is offered a cushion and a chance to take over the company fast.

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Selling in portions

At the end of the day, every business owner agrees to a deal they’re comfortable with when it comes to selling their investment of many a day. Sometimes, due to the nature of the niche or industry or size of the start-up, finding a buyer fast or ever might not be easy. In such a case, consider breaking up the business into different portions and offer them for sale rather than selling it in one piece.

For instance, you can divide it into assets, invoices, machinery and equipment or inventory and offer them to willing acquirers. You could end up making more than you had projected, change your mind to letting the entire business go and decide to remain with some portion for yourself or remain involved to a certain extent.

Selling Your Business in Portions

Lowering the asking rate

Incentives make the process of releasing a business to the market smooth and fast. A unique motivation to persuade a buyer to close the deal fast is lowering the asking price, especially if it had come up as a major hindrance during negotiations by potential acquirers.

Related: How to Set a Realistic Asking Price for Your Business

Including a stay bonus into the deal

After spending so many years building a successful business, letting it go and entertaining buyers might motivate the seller to think his/her needs are everything due to the attachment he/she has with the investment. However, always remember any successful deal and business sale will come through if the acquirer’s needs are met and considered. If the potential buyer has been in business buying for years, your needs will not sound like anything new. Rather than let the smart and experienced acquirer use loopholes you never knew existed to push you into a corner, think about offering an incentive such as a unique stay bonus.

While many buyers would like the business seller to stick around for a while at least up to a few months or years for complete transition to take place, they understand owners aren’t used to being told what to do. They could become terrible members of staff and hinder the potential buyer’s new plans for the company.

However, the buyer knows the value of your best, all or key employees, particularly for the transitional period. They need them around and unlike the seller they’re malleable and have no problem receiving directives from new owners. In such a case, a business seller can include a stay bonus into the purchase agreement to make it persuasive.

Any acquirer who knows that key persons within the company are comfortable or ready to remain around will have no problem getting on the table to discuss the deal. At the end of the day, you’d like the new owner to face as few hurdles as possible with the purchase and do it fast as logically possible. Note that a stay bonus will not be deducted from the buyer’s proceeds but from yours, considering you’ve integrated it into the deal with a clean heart as an incentive.

Undeniably, many incentives exist to hasten and soften the sale process of a business. Others include offering certain assets such as machinery or equipment as a part of the deal or training for employees to attain certain credentials.

Above all, it’s not only about selling a business, taking your money and leaving without ever looking back. You must always remember you’ve been able to bring so many loyal and hardworking workers into the fold and their welfare and future matters, especially if there’s something you can do about it.



Published by ExitAdviser |

Content ID: 8429