Selling Your Business
Choosing an Intermediary
The first and most essential question is this: do you need an Intermediary to sell your business? The answer is yes, unless you are selling (giving) it to one of your kids. An Intermediary is more likely to get the deal to close, will increase the selling price and allow you to run your business.
Selling your business is an emotional event, and few deals go smoothly from start to finish. The Intermediary is there to insulate the parties from one another and prevent deal-killing flair-ups. By being an objective third party, an intermediary can often bring calm to the negotiation headed toward disaster. Damage Control is frequently essential in getting a deal to go through.
The general consensus is that a typical deal takes about 200 to 300 hours of work. As a business owner, you are running your company and best utilize your time doing so. A commercial real estate professional can assist you in the process of selling your business to allow you to focus on your company needs.
Conduct a Business Valuation
If you're preparing to sell your business, first conduct a Business Valuation. Here are several types of methods to consider:
Asset Business Valuation
Asset valuation measures the worth of your assets, such as inventory, equipment and Real Estate. Asset valuation works best if you don't have a profitable business and are looking to liquidate. While this is a fairly simple and popular method of Business Valuation used by asset-based Small Business, it does not measure intangibles, such as good will.
Mark of Business Valuation
This method is a basic rule of thumb or multiplier method and determines that the worth of your business is based on a multiplier set by your industry. However, this method may not reflect the true value of your small business.
Earnings Business Valuation
This method is an income-based valuation or the capitalization of earnings method. The value of the company is determined based on historic earnings. This method works well for valuing companies with strong intangible assets because it only calculates earnings and takes into account the risks for buying your business.
Buying a Business vs Starting a Business
Starting a business is no easy task. If you are serious about operating your own business, you might want to consider minimizing some of the anguish and pain associated with startups by purchasing an established business.
Ten Primary Advantages of buying a Business versus creating a Start-up Business:
1. Lower risk of failure
2. Cash flow from day one
3. Proven concept
4. Proven products, services, marketing, and sales
5. Established customer base
6. Established supplying
7. Trained employees
8. Immediate credibility
9. Seller is likely to lend support and assist in financing
10. Easier to secure affordable financing to complete the buying process.
Call The Lachicotte Company today at (843)241-3881 to discuss your commercial business needs or email your information and we will be in touch with you soon.
