Selling a business can be a great way to exit the business ownership role, monetize your hard work and efforts, and pursue new opportunities. It can also be a way to pass on your business to a new owner who can take it to the next level and achieve even greater success. Our team can help you evaluate the value of your business, identify potential buyers, and negotiate the terms of the sale to maximize the return on your investment.

Our team can help you with this.

The 3 most common ways to determine what a business is worth is as follows:

1. Income-based valuation: Calculates the value of a business based on its financial performance, such as SDE(Seller Discretionary Earnings) or EBITDA(Earnings Before Interest, Taxes, Depreciation, and Amortization). An industry multiple is applied to the SDE or EBITDA to determine the value of the business. This method is often used for businesses with stable income streams and takes into account the industry, competition, growth potential, and risk profile of the business. The industry multiple can vary widely depending on the specific industry and the characteristics of the business being valued. The industry multiple is typically higher for businesses with strong financial performance, high growth potential, and low risk.
2. Asset-based valuation: Values a business based on the value of its assets, such as real estate, equipment, inventory, and intellectual property. Each asset is valued separately, and the values are added together to determine the total value of the business. This method is often used for businesses with significant tangible assets and can be useful for businesses with a high value of physical assets relative to their income-generating potential.
3. Market-based valuation: Compares the business to similar businesses recently sold in the market to establish a fair market value. This method considers current demand for businesses in the industry and can be useful for businesses with high growth potential. It is important to note that this method can be influenced by market conditions and may not always provide an accurate valuation of the business. It is often used in combination with other valuation methods to provide a more comprehensive assessment of the business’s value.

It is best to start preparing your business 3 years before you plan on exiting to ensure you have implemented all possible strategies to increase the value and industry multiple. Having a consistent growth pattern over a 3 year period makes your business more attractive to buyers and increases your valuation.

Here are a couple tips to prepare a business for sale:

• Make Your Business More Profitable
• Build a Great Management Team
• Have Multiple Ways to Make Money
• Build a Strong Brand
• Keep Good Financial Records
• Protect Your Ideas and Inventions
• Have a Plan for When You Want to Sell Your Business
• Make Your Business Run Smoothly
• Build Good Relationships with Important Customers
• Have a Strong Online Presence

The length of time it takes to sell a business can vary significantly depending on various factors, including the size of the business, the industry it operates in, the state of the economy, the demand for businesses in the industry, and the condition of the business. On average, it can take anywhere from six months to several years to sell a business. However, some businesses may sell more quickly, while others may never sell because the owner failed to prepare the business to be attractive and sellable. When a seller offers seller financing options to the buyer it significantly increases the chances of their business selling. Our team knows what buyers are looking for and we will be very transparent with you on the best creative strategies to market your business to increase the chances of it selling and for the highest possible amount.

Our team has a tried and true 5-step process for helping clients successfully sell businesses or business assets. Here are the five steps that we follow:

1. Evaluate the value of your business or assets: We’ll work with you to determine the fair market value of your business or assets, taking into account factors such as financial performance, industry trends, and potential growth opportunities.
2. Identify potential buyers: We’ll use our extensive network, resources, and expertise to identify potential buyers for your business or assets. We’ll provide you with detailed information on each buyer and help you evaluate their qualifications, interests, and offer terms.
3. Market your business or assets: We’ll use a variety of marketing strategies, including online and offline advertising, networking, and targeted outreach, to generate interest and attract potential buyers. We’ll also prepare and disseminate marketing materials, such as brochures, website listings, and social media posts, to promote your business or assets.
4. Negotiate the terms of the sale: Once we’ve received offers from potential buyers, we’ll work with you to evaluate the offers and negotiate the terms of the sale. This may include the purchase price, financing arrangements, and any contingencies or conditions that need to be met.
5. Finalize the paperwork and close the transaction: Once the terms of the sale have been agreed upon, we’ll assist you with completing all necessary legal and financial documents, such as a purchase agreement, real estate purchase contract, bill of sale, a lease agreement, loan agreement, etc. We’ll also help you with the transition process to ensure a smooth and successful handover to the new owner.