27 Dec Around the Web: A Week in Summary
A recent article from Divestopedia entitled “To Sell Your Business, Start with the End in Mind” explains the importance of planning your exit strategy in the early stages of your business. The article points out that emotion plays a big part in humans’ decision making process, and when a potential buyer perceives that the owner has not prepared a company for sale, they associate this with uncertainty, effort and stress that will accompany rebuilding the business.
Focusing on building your company’s culture is also very important for exit planning because a well-established company culture will continue to endure after you’re gone. Creating a self-sustaining culture that involves talented employees, succession plans for key people, talent acquisition and talent retention can help your business be seen as more valuable in the future.
A recent article posted on The CBB Blog entitled “Avoiding the Biggest Deal Killer: Time” explains how being fully prepared for a business deal, coming out strong, and maintaining momentum throughout the sale process can help you reach a timely closing when selling your business.
Time is of the essence when you are selling your business and here are some of the tips the article mentions to keep the process moving along smoothly and efficiently:
- Find the right time to sell your business but start early rather than selling too late
- Know why you want to sell
- Be aware of the company’s best features along with its problem areas
- Have a plan for what you will do after the business is sold
- Know the value of your business
- Be realistic about the price of your business
- Make sure you’re current on all taxes
- Keep operational details organized such as files, contracts, employee records, training manuals and business processes
- Know that your business can operate without you and the value of your business is based on its sustainability
The most important thing is being prepared before your business goes on the market so that your deal does not lose any momentum in the process.
A recent article from BusinessesForSale.com entitled “The Ultimate Guide to Business Valuation Part 1” provides an introduction to the basic guidelines for effectively arriving at a realistic valuation when buying or selling a business. The first step is understanding when and why a business sells, along with learning exactly what business valuation is.
Many business owners create an exit strategy before even starting a business, because a variety of unexpected factors can lead to a business going up for sale, such as personal problems, disagreements among business partners, etc. Sellers should understand the valuation process so they can see the business from the mindset of a buyer. Buyers should also understand the process so they can determine if the seller is being fair and realistic.
Business valuation involves educated guesswork and creative thinking in addition to looking at the numbers. Determining the value of a business is a specialized skill that takes into account the tangible and intangible assets of the company, which is why it’s good to have the help of experienced business brokers, attorneys and /or accountants to assist you with the business valuation process.