Getting ready to value your company
The price you receive for your business depends significantly on how well you have prepared the business to receive the best valuation and worth. The best advice is, when preparing to value your business, prepare as if your business is a “bride”. Remember that the best value is not the book value or what you think the business is worth but what the market says it is worth. It is the value that someone is prepared to pay for your business.
Plan ahead if you can so that you can choose the best time and prevent being pressured into a hurried transaction. For instance, it’s a good idea to start preparing the sale of your business now if you intend to retire in five years.
It’s also a good idea to keep your ideas private until the deal is almost complete. Customers and suppliers won’t react negatively, and your employees won’t have to worry about anything.
Financial and economic factors to take into account when selling your firm
Your sector’s specific performance as well as the overall status of the economy can have an impact. When a trade buyer’s own business is doing well, interest rates are low, and banks are eager to lend, it is simpler for them to finance a
The health of your company is a more crucial consideration. Sell when earnings are rising and are likely to continue to rise. Think about how sales cycles or seasonal changes affect your firm. You might have bigger order books during a certain season. See display excellent financial performance when selling your firm for further information.
Improving your company
Planning ahead allows you to optimise other elements of your operations and make your company as marketable as feasible. Additionally, it might draw attention to any problems that might affect a sale. For instance, you should make certain that:
The equipment is kept up with.
Key contracts are in order, there are no pending lawsuits or disputes, and you are in compliance with all laws.
See “Streamline your business operations when selling your business” for more information.
The precise date of a transaction may also be influenced by the tax repercussions and any upcoming changes to the tax code. Consequently, it is wise to get professional financial guidance.
Records are Uptodate
Make sure that all your business records with clients and the government and regulatotry agencies are update to date. For instance, are your annual returns filed promptly or do you have backlogs, are your CRM details up to date, can you prove how may clients and potential ones your business has, etc
Systems, processes and Intellectual Properties are well Documented
One reason why people choose to buy existing businesses is so as not to reinvent the wheel, not to go through the process of “startups”. In this regard, your systems, processes and any intellectual property must be well documented and kept up to date. people want to buy businesses with standards and proven systems for enhanced results.