Almost every business is for sale in some capacity. Assume yours is not for sale. Assume your business is valued at $100,000. You like what you do, and someone approaches you with an offer to purchase your business for $500,000. Is your company now for sale? There is an old saying that “Everything is for sale at the right price“, although most business owners are unlikely to face the circumstances described above.
Planning and preparation are required to sell your business effectively. However, whether you are contemplating selling it now or in the future, you should examine the following points:
1. Determine your genuine degree of interest in selling your business
Consider what technique you may choose to sell your business early in the decision-selling process. As a Business Broker in Florida, we deal with small business owners of all interest levels.
- My company is not for sale, but if someone comes in and gives me much more than I believe it is worth, I would sell it.
- My business is not for sale, but if you come across someone who would be interested in purchasing it, please let me know.
- I’d want to sell my company, but I won’t sell it for less than.. ( A somewhat inflated price). I am ready to accept that selling my business may take 1-2 years, and if I price it too high, my business may not even sell.
- I want to sell my business, and after extensive research, I believe the amount I am asking is comparable to what similar companies have previously sold for.
- I want to sell my business right now. I will set my pricing aggressively and lower than the price typically sought for comparable enterprises. I anticipate that this aggressive price will both assist me in selling my business and shorten the time it will take to sell a business.
- If you have a genuine interest in selling your business, as stated in the previous two paragraphs, you must do due diligence to determine the worth of your business.
2. You should expect the value of your business to be different from the value of your business to a potential buyer
- In the end, the price of your business is determined by what a willing and able buyer is willing to pay to acquire it.
- Strive for “reasonability” in your asking price for your business. If comparable firms sell for 1 1/2 times adjusted cash flow, why is your worth three times adjusted cash flow?
- Ask yourself what you would honestly pay to acquire your business.
- Conduct a free search on my website or other comparable websites to find out what similar companies to yours are asking to sell their business. Remember that every business is unique, so utilize such a search as part of your due research. The asking price of a business for sale and the price of a company sold for may vary substantially; however, asking to price can offer some basis-while current Businesses Sold information is more relevant
- Speak to your experienced experts. A business broker may be able to provide you with confidential information about sold firms in your region. Your accountant or lawyer may or may not be aware of such transactions. You might profit from the services of a Professional Business Valuation professional.
3. Whether selling your business is part of your exit plan or not, you should have one
- The majority of small business owners do not have an exit plan.
- You should have an exit plan if you own a business. Plan ahead of time and do your homework. Understand what you have or may have.
- Even if you do not want to sell your business, understanding the estimated worth of this potentially significant asset is beneficial. You know how much your home, vehicle, and other assets are worth. Understanding the value of your business is essential knowledge to have when planning forward.
When done correctly, selling a business can be a rewarding process. Understanding the correct valuation for your business may pave the company for a successful sale or the failure of a business to locate a willing and able buyer.