It’s a rough economy and you’ve always got ask yourself some important questions before you make any professional decisions. Money is tight, after all, and you don’t want to decide something that you might come to regret later. For instance, if you are in the position of asking yourself the question how do I sell my business then there are just so many questions you are going to have to ask yourself before you can even begin to make the transaction. Buying a business is complicated enough and involves a lot of different pricing and locations that come into play but selling a business is a whole different ballgame. If you are in the market to buy a business then you are going to want to consider a few more esoteric things such as reviews and possible future paths that your intended business might take. But if you are selling a business, whether through a business broker or through your own personal assets, then it’s all about the concrete realities. Here is a list of of facets you might want to consider before selling your business.
- Starting with the finances
It goes without saying that you’ll have to think about money beforehand. You are going to have to take into account all of the assets you have and all of the assets you stand to gain or lose. If you are conducting the transaction with a partner or even multiple partners, then you are all going to need to consider the health of the collective group as well. But let’s take a hypothetical example to get a concrete look at this important aspect of the process. Mary and Sally run a ride sharing service that helps transport people around the greater Austin Texas area. They started it within the past decade and it has held it’s own reasonably well with its larger competitors. They’ve been equal partners for the entire run of the business and they’ve never had any large scale issues working together. It’s been a quiet success which is, in some ways, the best kind of success. They’ve had a good run but they’re ready to move on and start another business together with some new ideas that they come up with together over Christmas. So, the question they’ve asked themselves remains, how do I sell my business, or in this case, our business?
Considering your position
So, with this scenario set and in place, we come back to finances. Mary and Sally look their assets and assess that their company is worth about five to six million dollars when taken together with safety considerations and employee salary. It’s a good amount and they’ve done well for themselves but they want to make that both parties involved in their transactions are going to be getting a fair deal. They want to make sure that they get a good answer to the how do I sell my business question and, in return, they want to give a good answer to involved in the buying question. So, the first money related question they need to ask themselves is how much do we sell the business for . It might seem like a simple question but it really isn’t. It can get very complicated.
The financial aspects of selling
Deciding on how much to sell a company for can get complicated because, as much as our two women want to be fair, they also want to get the right amount of money for what the business is worth. They are going to want to an initial offer that’s fair to the other side but also represents a honest and comfortable margin for them as well. Then there’s the business of possibly involving a sell side advisory and a sell side broker. These are important people in the how do I sell my business question and, if Mary and Sally can afford to utilize their services, they should. The price of the transaction, advertising, legal rights and financial counsel needs to be taken into consideration as well. Selling costs money even as it makes more and more money back long term.