The Building Blocks of Selling A Business

The Building Blocks of Selling A Business
on June 30, 2012 by in Blog

Toy blocks.Selling a business is not a single event. It is a process. Successfully selling a business requires a well-planned course of action that can speed the process along.

The time required selling a business, from the decision phase until the completion of the transaction may span many months. The amount of time for each phase varies from transaction to transaction. There is no typical pattern. The complexity of the deal, the size of the business being sold influences on how quickly or slowly a deal will progress.

You should recognize that deciding to sell a business, one that you may have spent years building, is often as much of an emotional decision as it is financial. If you are still uncertain about your decision of selling I offer you one word of advice: COMMITMENT. Be as committed to the process of selling as you have been to the process of growing and sustaining your business. This is your final opportunity to add to the profits that you business brought you over the years.

Knowing the market value of the business is the first step in preparing it for sales. Determining the value of a business is not like appraising real-estate where similar houses within a certain area bring the same general price. There are variables that affect the value of a business, such as: CASH FLOW, appearance of facilities, competition, ease of access and entry, economic trends, industry outlook, intellectual property, location, longevity, loyalty of customers and employees, reputation, return on investment, sales trends, special permits and licenses, terms of sales, and more.

Planning your strategy is critical to maximizing the ultimate value of your business. Issues such as these MUST BE considered:
How much do you want for your business?
How much cash do you need up front?
How much of a long term payout is acceptable?
How much of your time will you make available to the new owners?

–Larry Orenstein
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