27 Dec Around the Web: A Week in Summary
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A recent article from Forbes entitled “Should I Keep or Sell My Business?” shares crucial information for businessowners who are thinking of selling.
In the realm of private business ownership, the decision to keep or sell isn’t as straightforward as in public markets. Unlike stocks, private companies often undergo a single buy or sell transaction, making the decision complex for many owners who grapple with it only once in their careers. Bruce Werner suggests constructing a decision tree to navigate this dilemma.
Creating a decision tree involves evaluating various outcomes and issues, considering internal and external driving forces. To foster confidence in the decision-making process, owners must delve into the details. For instance, if faced with an unsolicited bid, criteria for evaluation should be established. Here are key questions to explore:
- Financial Security: Does the deal offer permanent financial security, aligning with the owner’s envisioned lifestyle?
- Industry Trends: Are industry trends favorable, or is there a decline, new competition, or technological disruptions?
- Business Growth: Can the business grow profitably, and is it more lucrative than alternative investments?
- Capital and Talent Requirements: What resources are needed to achieve growth goals, and can they be feasibly acquired?
- Workload: How long and hard does the owner want to work, considering personal and health factors?
- Personal/Professional Goals: Are there other aspirations or interests the owner wishes to pursue?
- Risk Tolerance: How much risk should be taken, considering the familiar risks inherited by long-term ownership?
- External Factors: What externalities, such as regulatory changes or technological shifts, could impact the business?
- Ownership Group Dynamics: Are there issues within the ownership group that necessitate an exit?
Evaluating each branch of the decision tree may take three to six months, allowing for thorough consideration and preventing hasty decisions. By addressing these questions, owners can make informed choices regarding the future of their businesses.
A recent article from The Southeast Missourian entitled “Considering Selling Your Business in 2024?” tells businesses owners what they need to know if they’re considering selling their business next year.
Selling a business requires careful planning and execution to maximize its value. Rather than waiting until the last minute, business owners should start preparing three to five years in advance. Key steps for selling a business in 2024 include:
Preparation: Begin preparations well in advance to enhance financial records, strengthen the business structure, and optimize the customer base to make the business more attractive to potential buyers.
Business Valuation: Get your business valued a few years before selling to set realistic expectations and allow time for value enhancement if necessary.
Financial Records and Legalities: Ensure accurate and up-to-date financial records and address all legal aspects to facilitate a smooth sale process.
Improving Business Appeal: Streamline operations, increase profitability, and enhance efficiency to make the business more appealing to potential buyers.
Other steps include a market analysis, updating valuations, settings up a smooth sales process, and more.
A recent article from Small Business Trends entitled “Where to Buy a Business: Everything You Need to Know” discusses the various ways entrepreneurs can find and purchase existing businesses, offering insights into the best methods and online platforms to explore.
The first recommended method for finding businesses to buy is working with business brokers who specialize in specific industries. Potential buyers can also search for businesses by connecting with other small business owners for referrals, leveraging personal and larger networks, and exploring local media and online ads.
For international business opportunities, the article emphasizes the importance of understanding the legal aspects of the deal and having a strong plan in place. Additionally, it provides insights into cost variations of small businesses based on their industry, location, and brand value.