When you are ready to sell your business, you cannot get it listed until you know how much you want to sell it for. The wrong price can cause the business not to sell or make you sell at a loss. It is the duty of a business broker for engineering companies Orange County to ensure that you sell for the right price in order to earn maximum profit. But how exactly is this done? In this post, we will be looking at the top considerations that are made to determine the value of a business.
All in all, before we get started, it is important to note that determining value is one of the hardest tasks when selling a business. This is because no matter how experienced a business broker for engineering companies Orange County is, the value of a business is always in the eyes of a buyer. You will only get what buyers are willing to offer for the business. To increase the chances of selling at the set price, the business broker has to present your engineering business in the right light.
Value of physical assets
The first thing a business broker does is determine the value of physical assets. This includes the value of furniture, equipment, vehicles, physical premises and anything else that will be included in the sale. While the value of physical assets might seem significant, it is only a small portion of the final figure. The broker will appraise the value of everything in the company.
Personnel that takes over the business
Another important consideration buyers make is on the type of team that is in your organization. In most cases, they will pay attention to who will be running the daily operations after you leave? If you don’t have a trained team in place, chances are buyers will be reluctant to acquire your business. The more competent your team is, the more valuable your business will be.
Having signed contracts shows buyers not just what you have done but what they can expect as income in the future. Signed contracts with suppliers, employees and clients show the buyer that your business will not fail as soon as they acquire it. Contracts give some sort of guarantee.
Long-time repeat customers
Do you have a list of long-time repeat customers? If you do, your engineering business will have significant value. This is because these kinds of customers give ‘good will’. Goodwill is determined by the quality of your client list, the niche you have developed as well as how your business is perceived in the area you serve.