How Goodwill Impacts the Value of a Business
If you are getting ready to sell my business Gardena it is crucial to account for goodwill. More than 50% of a business’ purchase price is attributed to goodwill. Goodwill makes up the largest part of the purchase price of any profitable small business. It is thus important to have knowledge and understanding of your business’ goodwill. Our business brokers at So-Cal Business Brokers have sold many businesses and we know how to determine goodwill. We are the best team for determining how much your business is really worth.
The main reason goodwill is so important is because it reduces the risk that a business’s profitability will drop after sale. Goodwill value is normally calculated as the difference between the purchase price of the business and the fair market value of tangible assets that are included in the sale. When you come to us for help when ready to sell my business Gardena, here are some of the factors we account for when calculating goodwill:
- Brand reputation
- Trade secrets
- Website and domain name reputation
- Trade name or brand recognition
- Existing contracts
- Developed processes
- Permits, licenses, regulatory approvals
- Employee experience and skills
- Customized software programs
- Proprietary designs, and proprietary know-how
- Production or order backlog
Customer lists, word-of-mouth, reputation
If your business has a list of customers that has generated a steady stream of revenue then prospective buyers will view it as a less risky investment due to its recurring revenues. What is more is that such a business will be able to continue building its customer list through word-of-mouth and reputation. These are all components of goodwill. They are revenue generating intangible assets. Our business brokers in Los Angeles will help identify all your revenue-generating intangible assets to help sell at maximum profit.
Proprietary databases, competitive advantage, processes
Knowledge is power and having knowledge that no other business has will give you an advantage over your competitors. If your database has email addresses, low-cost online marketing methods that you use to tell a story over time and offer helpful tips to your audience on how to protect their landscapes this season then that is part of goodwill. Your robust database that contains proprietary information developed by using processes that translate to future profits is invaluable and will add to your business’ goodwill value.
Our job when you want to sell my business Gardena is to help you identify your goodwill and monetize on it. Take advantage of our free, no-obligation consultation today and get insider tips and help on how to sell your business fast and for maximum profit.