A buyer’s offer will be factored, among other things, on a realistic market value of the assets and liabilities and the true earning capacity of the business. Therefore a seller’s expectations of price need to be in line with market reality.
A professional appraisal will tell you what your business is worth now and its most probable selling price (MPSP). Getting this valuation done before you plan to sell, identifies what you can do over the next couple of years to make the business worth what you want to get for it.
Our brokers will advise you on the operational, organizational and financial factors that can move your business up the value chain. For instance, the greater value comes when the business is making money without its owner’s involvement in the day-to-day activities. If you’re a business owner, make yourself replaceable. Put in place people and systems so the business is less dependent on you.
Be prepared with financial documents that are accurate and up to date. Just as important to your planning, you also need to understand the amount you’ll net after adjustments and taxes and the related structuring and tax decisions that can help you put more money in your pocket.
Uncover the real value of your business to a buyer
Sunbelt brokers are knowledgeable about valuation principles, financial statement analysis, taxation implications, inventory and goodwill issues, and other factors that contribute to the real value of your business to a buyer. Working with other professionals (i.e. your accountant, tax lawyer, wealth planner), they can help you maximize the value of your business and take advantage of tax strategies to maximize the proceeds of its sale.
All the stages and processes need careful balancing to bring the deal to a conclusion that works for both parties.
Reaching common ground is essential. When the sale is closed you and the buyer need to be on good terms. You are probably going to train them. You will probably be lending them part of the purchase price. You may even be staying on with them for a period of time.
Seller financing can add as much as 30% to the price of your business and you get interest on top of that. The terms and conditions on the balance due note (the difference between the down payment and the balance of the purchase price) can be anything that works and is agreeable to both parties.