To sell your small business, there are some very crucial steps to take before the listing. For one, it is very important to understand your business’s value in the marketplace. Obtaining a valuation allows you to thoroughly understand a business’s financials and their value in the marketplace, and give you an understanding of the price at which you should list your business for sale. Before that decision is made, a BOV can give you an inside look at what is working and what might not be.
I like numbers and stats. I enjoy analyzing earning trends, comparing price multiples, and studying buyer cash flow analyses. To most people, that doesn’t sound exciting, but it can be a beautiful thing to paint a picture of a successful business with numbers. It is critical that a business for sale is priced where it makes sense for the buyer to purchase it. For buyers to make an offer, the business must have sufficient earnings to support three things:
Definition of "good"
Counter-intuitively, entrepreneurs that have achieved significant success are often the most anxious. Huh?
Selling a business is unlike selling anything else.
If it's your first time involved in buying or selling a business, there may be some terms with which you're not familiar. Some of them are very important and having an understanding of what they mean will be very helpful.
When buying a business, some entrepreneurs are only looking at it as a source for future ongoing income, or as a way to replace a regular salary. For them, the business' potential for growth is less important than its ability to produce steady revenue.
You're purchasing a business. Congratulations! No matter how much experience you have and what talents you bring to the table, chances are, you have a steep learning curve ahead of you. Your new business may have its own unique processes and systems. That's just part of the reason why obtaining support and training from a previous business owner can be very valuable.
One of the most useful tools to examine the current state of a business and where it might go in the future is to do a SWOT analysis. Let’s examine why.