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Selling a business and house are similar because you have to know their worth.  There are many factors that play a part in determining how much you can ask for your company.  Here are a few things to consider when estimating a business’s value, so you can list the company for a justifiable Asking Price and sell for a Fair Price – if a Sale is the goal.

Things for Business Owners to Do & Consider When Considering the Sale of their Business

1. Provide Complete & Accurate Information

Income Statements, Balance Sheets, and Tax Returns for at least the prior three years are needed to start the Determination of Asking Price process.  Current year Interim numbers are also needed.  Reviewing the numbers is more often than not the starting point for Business Brokers and M&A Professionals to provide advice on a justifiable Asking Price. 

2. Review Your Relationships

Business Owners have day-to-day relationships that are often assumed, and their value and/or issues overlooked.  Evaluate your relationships with Customers, Vendors, Employees, Bankers, Accountants, and Attorneys.  Are you on good terms with them?  Are any strained?  As an outsider or buyer of your business – do you see solid/good relationships that give comfort?  Your honest and objective evaluation can add or detract from business value.

3.  Look Ahead

Selling a BusinessBusiness Buyers look at a) where the business was, and b) where it is now – to determine value.  Yes, a) and b) are factors, but the more important factor is the future.  What are the OPPORTUNITIES for the business going forward?  Is there likely to be growth?  What is the growth capacity with the current facility.  What are limiting conditions – employees, financing, other?  To the Owner – if you were 20 years younger and going to acquire your business – what would be your plan for it?

4. Look in the Mirror

As Business Advisors to both business sellers and buyers, we are always trying to determine if they are serious and committed to sell or buy respectively.  LOOK IN THE MIRROR and ask: “Why am I selling?”  How do you see your business and personal life after a sale?  What are your plans?  BE HONEST with yourself!

An Asking Price for a Business for Sale starts with numbers, then a review of non-financial factors, and a look to the future.  A business owner committed to sell along with a justifiable Asking Price will allow serious buyers to proceed.

 

If you’re interested in buying or selling a business, the professionals at Zoellner Garten & Company in Cincinnati, OH, will guide you to a successful sale or acquisition. Since the company was founded in 1988, they have helped numerous buyers and sellers throughout Southwestern Ohio, Northern Kentucky, and across the United States. Call (513) 852-2400 to schedule an appointment with an adviser, or visit them online.

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