Business owners often ask brokers for advice when they plan to sell privately-owned business. The core issue could be related to financial factors. This could also be related to lifestyle issues. For many business owners, their business is the center of their lives. Much of what they do each day is to manage their business, starting from when they bounce out of bed and go to bed later at night. In this case, it is obvious that the decision to sell our business can be quite life-changing. However, it is possible that we are eager to sell our business due to the following reasons:
- Someone offers us significantly more than what our business is really worth
- We have serious health issues and there’s no one who can be delegated to replace us
- Family disputes that cause disruptions of business operations
- Plan for retirement
- Inevitable industry or economic crash
We should have a realistic idea how much our business is worth and it is important for us to know about the actual value of our business. The updated business reports should contain our present assets.
It is important for us to have proper business plan and this will make it easier for us to sell our business. Business books, libraries, community colleges and business brokers should be able to teach us on how to sell our business at low cost. We should be able to get an inexpensive start in how to sell our business by attending various seminars in the local area. We could also choose competent individuals who can provide us with some kind of guidance. The first thing to do is to make a list of our physical, tangible assets; although the actual value of our business is much higher than that. Let’s assume that our estate is worth $1 million, then we should make a list of intangible, non-physical assets. Skilled employees could be the core of our business, more important than our office building and expensive equipments. Other than assets, we should also make a list of liabilities. The total value of our assets should be much higher than the total value of our liabilities. This will be equal to the net value of our business.
Quality of life could be a significant factor when we are planning to sell our business. It is important for us to give the idea of selling our business a real thought. When a businessperson has been burned out and distressed by the constant amount of work, they may start thinking to sell their business. The trick is to make sure that the transition of ownership to the new owner won’t cause a decrease in value. Other business owners may be anticipating doom and gloom in the current industry and this encourages them to sell their business. However, we should know that some of the economic commentators continuously predict the credit meltdown and this isn’t always true. We should be able to distinguish between the truths and the lies, when it comes to predicting the future of our business.