06 Apr 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 Inc. entitled “Selling Your Business? These 5 Simple Changes Can Boost Your Price 50 Percent” discusses likely reasons businesses fail to sell and how to improve your odds. An unrealistic asking price and failing to prepare the business for sale are common pitfalls. With proper planning, a business owner can improve their chances of selling and increase their sale price.
5 steps for business owners preparing for a sale include:
- Clean up your financial documents
- Make it less about you
- Review your contracts
- Create an owner’s manual for your company
- Clean up your reputation
A recent article from Exit Strategies Group entitled “The Importance of Valuation in Business Sales” discusses why a proper valuation is critical when selling your business. Skipping or abbreviating this key step can lead to an inaccurate value, poor decisions and underwhelming results.
A thorough business valuation involves fact gathering, normalizing financial statements, identifying intangible assets, analyzing value drivers and risks, and financial projections.
Conducting a business valuation also involves selecting and applying the valuation method that best fits the facts and circumstances of the business.
A recent article from Sunbelt Network entitled “What to Look For in Financial Statements When Buying a Business” offers helpful advice for business buyers who are analyzing potential acquisition opportunities. This is a big investment, so it is important to carefully review and scrutinize the financials of the business for sale.
Three key financial documents that you should review with your accountant or business broker include:
- Income Statement – Here you can analyze revenue, expenses, gains, losses, operations, and sector performance.
- Balance Sheet – In this document you can assess assets, liabilities, liquidity, and accounts receivable.
- Cash Flow Statement – This will show you where money is coming from, how money is spent, cash by activity, and a look into future cash flow.