Buying or selling a business involves both art and science. One should know the standards and norms applied by experts in the field of business valuations, which is the science portion, but the "art" portion comes from the forces of the market and the constant changing dynamic of expected rate of returns for given risks. "Fair Market Value" is defined at the price at which the business would change hands between a willing buyer and a willing seller when the buyer is not under any compulsion to buy and the seller is not under any compulsion to sell. Furthermore, it assumes that both parties have a reasonable knowledge of the relevant...Read more
Recent Posts by don
Questions you should address if you are thinking of selling your own business.Read more
- How do you determine value? That is the first question you must answer in addition to the next most important question: Can the buyer afford the purchase price and if not are they able to obtain financing for most of the purchase price?
- How do you maintain confidentiality? Not just with your employees, but your customers, suppliers, banker, and competitors.
- How do you structure the sale? Should you owner finance and if so what assurance you have the note will be paid and if not that you have a reasonable chance to recoup your money?
- If not owner financed, then...
When is the best time to sell your business? U.S. businesses are enjoying growth and increased profits for the first time since the economic crash of 2007-08. Many business owners had to postpone their decision to sell and retire until the economics of their business improved. Now that the businesses reflect healthy profits, the time to prepare to sell is now. A husband and wife who owned a small construction company called me in 2006 to discuss selling their business due to some health concerns of one of the owners. During the next two years they implemented our suggestions, resulting in increased revenues and transforming the business from one operating out of a pickup to a stand-alone company. Several months...Read more
“The best way to predict the future is to create it” ~ Peter Druker What would happen if you or another key executive were to die or become incapacitated unexpectedly? Death is an unsettling topic for most entrepreneurs. Planning for that possibility now will save you and/or your family and your company a lot of financial uncertainity and impact on the value of the company. Remember you will eventually exit your business; either voluntarily or involuntarily. Why not plan now? What is an exit plan? An exit plan is a comprehensive road map to successfully exit a privately held business. It asks and answers all of the business, personal, financial, legal and tax questions involved in selling a privately owned business. It includes contingencies for illness, burnout, divorce, owner’s...Read more
Recent Comments by don
No comments by don yet.