When deciding to sell your business it is important to first ask yourself why you want to sell the business, by understanding why you want to sell the business you will understand more not only about your own needs but also about the needs of the business itself.
In order to gain a good idea of how to evaluate a business there are several important factors a corporate financial advisor will want to take into consideration. To evaluate a business you should aim to look at the history of the business, the performance of the business at the time and to also gain an in depth understanding of the profit margins and turnover amount. The same can be said for the company debts, it is important to fully understand any outgoings.
Ask why the business is being sold, this may then prompt more questions from yourself. It is a good idea to identify any regulatory or legal changes/ implementations which may have an impact on how the business works.
It is important to consider each of these points before making an offer as well as discussing them with a corporate financial advisor who will be able to explain what the impact each of the answers means to your offer.
As well as tangible assets there are also intangible assets to consider such as existing relationships with clients/ customers, company property, the relationship between the company and suppliers and the general reputation of the company.
The selling price will certainly be affected by the location of your business, the industry it is in and also the time of year you sell it. It is best to seek professional advice before making any final decisions. It is vital to keep a broad mind even after you have decided to definitely sell your business. Still have a long term business plan and continue working so that whatever the outcome you will be prepared. Make sure to take professional advice as trying to act on your own behalf can be potentially damaging to any deal.
Rickitt Mitchell specialise in Management Buy-ins, Management buy out and corporate financing. They also specialise in giving advice on buying and selling a business and can help with your business valuation.