04 Nov Around the Web: A Week in Summary
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A recent article from Boss Magazine entitled “5 Things to Consider Before Buying a Business” discusses the importance of thoroughly evaluating a business to make sure it is a good investment before making any final decisions.
When evaluating a business, consider the following factors:
- Financial Stability – revenue trends, profitability, available funding
- Reputation – social media profiles, reviews, legal records
- Potential for Growth – demographic trends, consumer preferences, regulations, competition
- IT and Technology – hardware, software, upcoming capital investments
- Due Diligence – industry, employees, customers, vendors
A recent article from Kiplinger entitled “Selling Your Family Business? 14 Things Small-Business Buyers Will Want to See” explores how to prepare your business for new ownership and how to get yourself organized before talking to buyers. Transparency is essential and you will want to show buyers the most accurate picture possible.
Buyers will likely want to see the following items:
- Business Plan
- Financial Statements
- Business Licenses and Permits
- Organizational Paperwork
- Certificate of Good Standing
- Organizational Chart
- Employee Contracts
- Operating Manual
- Inventory List
- Brand and Intellectual Property Assets
- Business Insurance Policy
- Letter of Intent
A recent article from Forbes entitled “Three Questions To Ask If You’re Thinking Of Selling Your E-Commerce Business” discusses important considerations for business owners considering a sale. Selling doesn’t have to be scary, and with a proper exit plan you can increase your chances of success.
First, ask yourself why you would sell. What is your magic number? Is your business worth that magic number right now? If the numbers don’t align, would you sell for less?
Second, ask yourself what you would do instead. After the sale is done, you are basically starting over. Think about your future and find something meaningful.
Third, ask yourself who would want to buy the business. There are many potential buyer types, so it is important to identify who is the right fit. A business broker can help with this.