How a Broker Helps
Selling your business is not only a financial decision, it is an emotional one as well. If you have invested your hopes and dreams over time in the creation of your business, handing it over to someone else, even with financial gain, may not be an easy thing to do. Your business broker has been through this process and is familiar with the steps involved.
Working with a professional who understands the challenge of change can smooth the process so that you can proceed in your best interest.
Selling Your Business–Six Key Points
Preparing your business for sale can be overwhelming, but ultimately rewarding and profitable. Just like painting, it is 90% preparation. Below are 6 key points to remember:
- Plan ahead. Start at least six months to one year before you think you will be ready to sell.
- Get your books, records, and Profit and Loss statements up to date and ready.
- If you have a brick-and mortar storefront or office, clean it up! Haul out the garbage!
- Get a professional, objective business valuation. Don’t just guess or fantasize about your listing price.
- Get your equipment list in order, with realistic current market values for major items.
- Take a deep, relaxing breath! Small businesses currently average about twelve months to sell. Yours may take less time…or more.
What is Goodwill?
One of the major issues of concern for small business owners today is: how do I build and value the goodwill of my business? The true value of any smaller business, or large business for that matter, is not the break-apart value of its tangible or hard assets. The true spirit and value of the business resides in the reputation, logo, trademark, lease value, web site, policies and procedures manuals, business plan, and perceived quality on the part of the customers and community; also known as goodwill. Goodwill, like all other important intangible business assets, is very real, but invisible. Trucks, machinery, inventory, human resources, and raw materials don’t make a profit all by themselves. The organizing, controlling, coordinating, planning, and unifying power in the business is what brings everything together and produces the “spirit” of the business that results in cash flow and profit. In simple terms, goodwill is that portion of business value over and above the expected return created by the other, tangible assets of the company, such as furniture, fixtures, and equipment. Goodwill may be an important component of your business’s value, or of the one you are purchasing. At Coast Business Brokerage we take the time to determine its true value for you.