Updated: Jul 22, 2022
What Should I Do First?
If you're thinking of selling your business, the first step is determining why you want to sell; then arranging your exit strategy once you've made up your mind.
Before selling your business, the most critical question to ask yourself is "why." People sell their enterprises for various reasons, including a desire to alter their lifestyle or spend more time with their families.
If you're looking for a buyer for your company, you shouldn't hurry into it without first conducting some investigation. You'll want to double-check that the business is worth what you think it is and that the buyer has enough cash on hand or access to financing to cover the acquisition price.
How Much Should I Ask for My Business?
A company's value is more than just the sum of its assets. The market size, profitability, growth potential, and other aspects evaluate a company's value.
To further comprehend this, examine the following two approaches to determining a company's worth:
1. The company's net value of assets, which includes cash, inventories, buildings, land, and equipment, is the first option when calculating how this method is commonly utilized.
2. The second method is to use its equity worth, or what it would sell for today if all of your assets were liquidated and sold at market prices.
Is an Investment Banker Required for the Sale Process?
Investment bankers frequently aid the sale of a business. They offer financial guidance, assist with due diligence, and provide a company appraisal. They are also often in charge of negotiating the terms of a contract.
Because they have experience and knowledge of how to discover possible buyers and negotiate deals, investment bankers can be beneficial during the sale process.
What Are Some of the Risks of Purchasing and Selling a Business?
Potential pitfalls of buying and selling a business:
• The seller's lack of openness
• Lack of information about the business
• Seller's unwillingness to disclose all relevant information
• Unclear or missing financial statements
• Seller's refusal to compromise on price or terms
• Failure to comprehend and agree on post-sale transition expectations
To find out more about selling your business, book a FREE consultation HERE.