How Can I Value My Business for Sale: A Short Guide

It doesn’t really matter whether you are interested in buying a business or selling one, you must find out how much that business is actually worth. In case you are selling a business, offering a very low price will definitely help you sell your business faster, but you may lose some of your profit. On the other hand, if you are buying a business, overpaying will affect your budget. This is the reason why so many people are looking for an answer to a very simple question – how can I value my business for sale.

For starters, it may be a good idea to hire a business attorney. These professionals can help you find out the real value of your business. They have the necessary experience in this field and vast knowledge which helps them find the right way to evaluate a business of any kind.

Next, you should check your revenue reports for the past few years. Analyze the profits before compensations and taxes. It’s the best idea to focus on the last two or maximum three years because the reports from before are not that relevant. You must be realistic and see how your company performs at this moment.

The next step is to check the revenue numbers. Don’t skip the details. In case the revenue stream points out that there is a steady growth in the last 3 years, this has a positive impact on the price. But, if these numbers are going down, then you should be prepared to lower the price. Of course, these numbers won’t mean that much if you have a plan to boost the sales and present it to the potential buyer in the right way.

During this process, it’s also a smart move to hire an independent appraiser to confirm the value of the business. These appraisers have knowledge in different areas and in many cases, they are more experienced in different fields than you are. This is a second opinion that can help buyers make the right decision.

When you are trying to sell your business, it’s very important to stay realistic. We all want to make the most from a sale like this, but overpricing your business will slow down the process. At the same time, an unrealistic price may make you look less serious in the eyes of potential buyers.

 

The Simple Steps to Put Your Business for Sale Online

 

At times, a change is good. After working for long on your venture, you may decide to offer it for sale. Either you want to try your leg on a new niche or to retire. In such cases, you want to reap maximum benefits from your hard work and years of commitment to the business growth. However, offering business for sale is not a breeze. Failure to have a solid strategy makes a loss inescapable. To do it successful particularly when the sale is happening online, you need to follow several steps as they appear below:

Prepare your business for a sale

Unless it is an emergency case, you should not pursue an ad-hoc process. When selling your business, you need to prepare it for the same. The preparation process involves doing a business valuation. You should have precise information on what your venture is worth of before engaging a buyer.

Also, it is crucial to have a goal on the results of the selling process. Is your purpose in securing a better price? Do you want to maximize the final gains or the current offers are okay? Answering these questions will offer you a direction on the next course of action you should take to ensure the business sale preparations are credible and compelling.

Start selling your business confidentially

As you continue to prepare your business for sale, you can kick off the buyer searching process. For instance, you can search for potential buyers online and contact them to hear their views and what they have to offer. However, you should not do this in public. Starting to sell your business in public can affect its value. First, the customers can think that you are bankrupt. Hence, they find an alternative. Also, they will have a fear of not getting the quality of service they enjoyed. As such, do not disclose your business selling plan until you are sure that nothing can change its current worth.

Complete the sale process

Indeed, through the confidential approach, you found a worthy buyer for your business for sale. Now, it is time to close the deal. At this step, you need advisors and experts to help you go through the business transfer process. For instance, you need a qualified and highly experienced attorney to assist you in completing various legal documents. Otherwise, if you are not observant, you can lose much cash at this stage while offering your business for sale online.

Related Articles:

Leave a Comment

Your email address will not be published. Required fields are marked *