5 Key Points To Know While Selling Your Business

 5 Key Points To Know While Selling Your Business

Selling a business is never an easy or simple process as your main motive is to get the maximum value for your business and to find the right buyer or broker to sell your business. So here are the few key points that help you to sell your business:

Company Resale Value

The most important thing you need to keep in your mind while selling your business is that you need to have your eye on the prize i.e. your ultimate goal is to have a high value sale and to have highly organized bookkeeping records. As no reputable buyer will purchase your business unless they can fully understand your profits and losses (P&L). As if you maintain clean accounting records, you will automatically be positioned for a more successful sale.

Understand the Valuation

Understanding about what buyers will look at and how it impact the value of your business is very critical aspect. As many business owners assume the value of their company on the basis of the revenue i.e. the business cash flow, earnings before interest, taxes, depreciation and amortization. As buyers look for the things like scalable infrastructure, strong management, customer concentration and its growth capacity.

Finding a Buyer

To find the best buyer that pays the best price for your business is also one of the important step in accordance of selling your business. Buyers can come from your personal network, your broker’s network or from competitors. You can also locate your buyers among vendors, private equity firms, strategic companies and high net worth investors.

Qualify Potential Buyers

Many potential buyers that express interest in buying your business are not so qualified to buy your company. So, a good M&A (Merger and Acquisition) advisor will be able to ask potential buyers the appropriate questions in order to screen the buyer. This will help the owners and company’s management team to continue focusing on expanding their business rather than wasting their time talking with an unqualified buyer.

Negotiating a Deal

The sale of a business has many professional and financial considerations for the management team and the owner as the purchase price is only one component of the overall result. The other aspects on which a buyer and seller will negotiate may include: stock sale versus asset sale, seller financing and security to support that financing, employments contracts, current assets retained by the seller and equity ownership.

So these are the some key points that owner of the company has to keep in his/her mind while selling a business.

Clare Louise

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