Business broker Orange County is there either to take over the sale of your business or to give you guidance. You choose what he should do. With that out of the way, let’s take a look at some of the important things you need to do when getting ready to sell your business.
Know what the buyers want
In order to get your business ready to sell and to use the right marketing strategy, it is important that you know what prospective buyers will want to see. There are five main things that buyers look for when considering a business.
Very few buyers want to buy a dying business. This is why business brokers Orange County stress on making your business as profitable as possible before listing it. If yours is a dying business, buyers will use that to their advantage and they will end up buying it for peanuts.
- Competitive edge
The business may be profitable now but will the trend continue? Buyers want to see what makes your products/service better than those of your competitors. Can your commodities be copied easily and legally? How unique your business is will determine whether buyers consider it or not.
- Management structure
Will the business run smoothly without you? Your buyers will want to make sure that you have systematized your business. They want to buy a business that will operate successfully in your absence.
Will your business withstand the trying times in the future? Will it grow? When marketing through a business broker Orange County, you have to show your buyers that your business has a future and great potential for growth.
What is the business culture? Do the employees understand the intangible bases of your business’ success?
Understand the technicalities
Now that you have addressed the point on what buyers will want to see, it is time to take a look at the technicalities. The first thing they will want to look at is the worker classification. Are the key members of your team classified as independent contractors when they are essentially employees? Misclassifying actual employees can lead to significant liability and tax.
Buyers will also want to see the leases, long-term supplier contracts, inefficiencies and taxes. The rule of thumb when getting your business ready to sell is to ensure that there are no technicalities that may discourage buyers from considering your business.
Your financial professional
Last but not least, the kind of financial professional you work with will determine how fast you sell your business. Mostly, business brokers Orange County will independently handle businesses worth between $500,000 and $5 million. You may not be able to get investment bankers on board unless the business is worth more than $5 million.
Getting the business ready to sell is never an easy thing. That is why you must work closely with a business broker Orange County. The broker will hold your hand and ensure you emerge on top.
Business brokers San Diego have the experience, professional training and the connections you need to sell your business faster. However, when getting ready to sell, you should not just rely on the negotiating power of the broker. There are a couple of things you should do on your part in order to boost the sale price. The purpose of this post is to teach you how to get your business ready to sell.
Know your business’ worth
This is a no brainer. The first thing you have to do prior to listing your business is to get a business valuation report. You can either hire an independent valuation expert or rely on the competence of a business broker San Diego. Your appraiser will be able to determine the real worth of your business as well as set a realistic selling price. Getting a business valuation report is a requirement when selling a business. Buyers will always ask you for the report and at times hire their own valuation experts. Don’t base anything on estimations.
Pick the right time to get your business on the market
Just because the business valuation report specifies a certain figure does not mean this is the exact amount you will get once you start selling your business. There are many things that come into play. The time you choose to sell the business is one of the many factors. If you are not being forced to sell your business by circumstances like bankruptcy and legal issues, you should not be in a hurry to get the business of your hands. The right time to sell your business is when it is doing really well. This is the time when it is more attractive to buyers and the time when it is more profitable. You should also consider the market conditions such as the bank interest rates and the economic status.
Promote your brand
Deals do not start in conference rooms. Today, deals start with online searches. What will people see about your brand when they Google it? To make your brand stand out, you have to improve its appearance; both physical and online appearance. You will also need to boost its online visibility, integrity and create a good following. Business brokers San Diego will be able to help you do this.
Identify your selling points
Whether you are selling on your own or through a brokerage agency, it is important that you identify and promote your selling points. These are the strengths of your business. What is the business good at? What makes it the ideal choice for prospective buyers? You need to know your strengths and maximize them. To convince buyers to consider your business, it should feel that the business fits their criteria or it has numerous attractive features.
These are just the first things you need to do when selling a business. All in all, the most important thing you need to do is to liaise with a business broker San Diego. He will guide you through the process and make sure you get the best deal at the end of it all.
Business brokers Los Angeles do not just help with the sale of a business. They can also help you with business valuation. The best thing is that most of these valuation services are complimentary; you don’t need to pay a dime for the service. However, before you get started, it is important that you understand the three main valuation methods that are used by appraisers and brokers alike.
Asset based approach
Just as the phrase implies, this valuation method focuses on the business’ assets. The expert totals up all the investment in the business. This strategy is used in going concern and in liquidation basis.
- Going concern: The strategy here is to make a list of the business’ net balance sheet value of its assets then subtract the value of liabilities.
- Liquidation basis. This looks at the net cash that can be received if the assets of the business were sold and all the liabilities paid off.
This valuation method is more difficult when working with a sole proprietorship. This is because the assets here exist under the name of the owner and it can be hard to separate the assets from personal use and business. More often than not, a business broker Los Angeles will use this strategy with corporations since the assets are all owned by the company and are included in the sale of the company.
Earning value approach
The valuation report here is based on the business’ ability to produce wealth in the future. The most common approach used is the Capitalizing Past Earning. With this method, the business broker LA or valuator will determine the expected level of cash flow for the company using records on past earnings. The records are normalized using the usual revenue or expenses then multiplied by the capitalization factor. The capitalization factor is the reflection of the rate of return a reasonable buyer would get on the investment and the measure of risk that can be expected to come with the earnings. The Discounted Future Earnings is yet another approach that is used with this method.
The business valuation of a sole proprietorship can be tricky when using this method. This is because customer loyalties are tied directly to the business owner. Valuation of a sole proprietorship has to account for business that may be lost after a change of ownership.
Market value approach
This is the main strategy used by business broker Los Angeles. It tries to establish the value of a company by comparing the company to similar businesses that were sold recently. This method will only work if there are similar businesses in the same region.
The three are the main methods a business broker Los Angeles or a valuator may choose to use when determining the value of your business. The expert may use one method or combine several so as to get a more accurate report.