29 Dec Around the Web: A Week in Summary
The following information has been sourced by Business Brokerage Press for the benefit of the business brokerage community. The views of these articles do not necessarily represent the views of Business Brokerage Press. We hope you find this information helpful.
A recent article from Real Business entitled “6 Tips for Selling your Business” offers tips for business owners who are contemplating selling their business. The key to a successful sale is to start the planning process early.
When planning for the sale of your business, consider the following tips:
- Identify why you want to sell
- Make sure you have a very clear financial picture of the business
- Gather all important paperwork
- Drive value by maximizing profit
- Optimize your online marketing
- Document all business processes
Click here to read the full article.
A recent article from Forbes entitled “Understanding The Importance Of EBITDA When Selling A Business” discusses how EBITDA (earnings before interest, taxes, depreciation and amortization) impacts the sale of a business. It is critical to understand your business’s EBITDA, why buyers care, and how to increase it in order to maximize your sale price.
EBITDA is a clear indicator of the financial health of your business. Buyers will judge your business based on it and the value of your business will be determined with a multiple of EBITDA. The three types of EBITDA include normalized (no adjustments), adjusted (one-time expenses added back), and pro-forma (future happenings factored in).
While increasing EBITDA is certainly a sound strategy for increasing the value and appeal of your business, it’s not the only area of importance. Also consider customer concentration, revenue streams, durability, leadership, culture and the industry as a whole.
Click here to read the full article.
A recent article from Exit Strategies Group entitled “When selling your business is your succession plan” explores how the potential transition of a business can impact the sale of the business. Many owners may look at the sale as the transition. But the buyer may think otherwise.
If the buyer isn’t ready to take the reins and run with it, they might want to see key employees in place that will stay on during and after the transition to help keep the business operating smoothly. If this leadership is lacking, it could pose an issue for buyers and discourage them from moving forward with the purchase.
One possible solution is a multi-year transition period where the previous owner stays on for a certain period of time to help keep the business running and to help develop leadership.
