Are you considering selling your company?
Buying low and selling high is the dream of almost every single person in the world. When questioned how to sell your company for profit, the answer lies with people like Warren Buffett and Donald Trump billionaires. This advice sounds amazing, is amazing, but it is much more difficult to navigate than you would think. If it truly were that simple there would be many more millionaires walking around today. If you are looking to sell your business the odds are not in your favor. Many businesses are listed but never sold and many times the ones that do sell are sold for much less than the seller hoped for. However, Michelle Seiler-Tucker, business broker and founder of Capital Business Solutions, says that you can potentially sell your business for much more than its worth if you have the ability to follow a few instructions.
“Unfortunately many business owners wait until a catastrophic event has occurred in order to sell their business and when that usually happens the business is typically trending downward and it’s not making as much money as it once was,” she says. “The best time to sell a business is when your business is doing well.” Timing is everything in life and in the business world it is no different. Do not wait until your business has peaked. If you are going to sell do so when business is booming.
She also noted that the majority of businesses do not have their books in good enough shape to be attractive to potential buyers. If you are hoping to sell high, then you need to have your books in tip-top shape. “Most business owners live out of their business in order to decrease their tax liability so many [of them] are running all kinds of personal expenses and non-recurring expenses through their business, such as travel, meals, entertainment, repairs, etc., and this is really true discretional earnings so we have to dig deep, go through all the books and records and add those personal and non-recurring expenses back to the bottom line. This is one of the most crucial aspects of learning how to get your company to sell for more than it is worth.
Branding is also important to the selling price of your business. There are five levels of branding that range from not knowing the company to only using and recommending the company. You obviously want to be recommended by customers because that is free advertising. Not only is branding key but so are the customers. If you have a small list of clients, then your business is not going to be as attractive. If you are the only client, then you are in trouble.
Understanding what makes a business valuable is what will help you to set your business apart from the plethora of others. Not only do you need to invest in a strong brand but you need to diversify your clientele. Learning how to put your company up to sell is not the easiest thing in the world but it can be accomplished by learning the ins and outs of your business. Once you are able to do this you will be well on your way to selling your business for much more than you ever thought possible.
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