Buying & Selling
THREE VERY IMPORTANT ISSUES THAT CAN HAVE A DRAMATIC IMPACT ON YOUR POTENTIAL BUSINESS VALUE:
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- The business needs to be able to virtually guarantee future earnings.(PROVEN SYSTEMS IN PLACE)
- The risks need to be reduced(THE LOWER THE RISKS THE MORE BUYERS ARE WILLING TO PAY)
- The attractiveness of your business(COULD IT BE A POSSIBLE MERGER AND ACQUISITION TARGET)
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There are many different factors to assess when valuing a business; financials are only 1 of these.
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Why are businesses sold for less than they are worth?
There are a number of reasons why businesses fail to sell for as much as they are worth.
Firstly, the owner's decision to sell the business could be based on a building frustration with the constant pressure and headaches, which results in the owner "just wanting out.” Secondly, the sale could be based on financial pressures. Thirdly, it could be because of a change of lifestyle wants and needs.
No matter what the reason, a business owner decides that the time is right to sell and he or she wants to make the sale as soon as possible. It is at this stage that many business owners realise that there is a huge gap in their knowledge.
Six of the most commonly asked questions
- How do I sell the business?
- How do I advertise the business?
- How much do I sell the business for?
- What information do I need to prepare?
- How do I keep the sale confidential?
- What do I say to my employees?
If you are planning to own, BUY OR SELL a business the ideal business will posses most of the following:
- One that is well established
- Excellent Reputation
- Has a growing population base
- Is not adversely affected by drought or rains
- Has a good location
- Has a good product range
- Is still in a growth cycle
- Has excellent staff
- Management systems in place
- Staff morale is very high
- Solid and growing financial figures
- A business plan in place
- Future sales projections in place
Buyers and sellers
Remember in most cases it is better to buy a well run business, one that delivers cash flow and profit from day one.( Obtaining finance from a bank is much easier with a good business. )The price you pay for a good business is
based on the potential future profits that it will generate.
Trying to turn a poor business around and hope that sales, cash flow and profit will eventually reward you,
can be a very hard and devastating path to take, many go broke and many marriages breakdown due to the financial pressures and long work hours.
Many Business Owners sell their businesses for much less than what it could be potentially worth.
When you sell a house or investment property most people will renovate or make sure the property is looking its best to sell at the best price possible.
Make sure your Business is renovated before you sell.
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Sell Your Business - The Practical Guide
Have you ever dreamed of selling your business? This workbook is designed to provide you with the practical advice that only someone that has worked extensively in this field could provide. It is designed and written for Business Owners and Advisors as a practical guide. |
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