How to Sell your Grapevine, TX Business to Perfection!
A few years ago, selling your personal business would be considered to be blasphemy, but now it has become an integral part of our economy in Grapevine TX. Many people have started selling their businesses for a variety of reasons, but most people end up selling their businesses far less than the market value of their business. This is due to the fact that it is not every day that an individual decides that they want to sell their business and often do not have the required knowledge in order to sell their business to perfection.
Selling a business can prove to be quite challenging and involves impeccable attention to detail as there are so many different aspects that an individual will have to consider before selling the business. Most people put their blood, sweat, and tears in their business and when they decide to sell their business they do not have the required tools in their arsenal to scrutinize their business effectively and often end up either valuating their business at a high or low price.
In order to sell a business in Grapevine TX or anywhere for that matter, a business owner has to toke into perspective many different factors and there is no generic methodology that can be applied in such scenarios. Each business by virtue is unique and selling a business entails an array of different aspects that have to be utilized effectively.
Why would someone sell their business?
Before we tell you how to sell your business to perfection, we should first discuss the different factors that induce individuals into selling their beloved businesses. Some of the most profound factors which fuels such projects are:
- Diversifying into a new business
- Financial issues
- Boredom
- Retirement
- Business is getting too difficult to manage
- Disputes regarding assets
- In order to raise capital for other investments
- Other viable options
As mentioned before selling a business should not be taken lightly and in order for any individual to get the best price for their business they have to adopt a generic approach rather than a biased one. Obviously, every individual that has worked so hard for their business will automatically request a high price but unfortunately it does not work that way. Your business will not be valued according to the amount of effort you put in, but is rather valued according to quantifiable factors. So if you are planning on selling a business, please put your personal feelings aside and consider this proposition as another business dealing. Rest assured we will make sure that you get the right price for your perspective businesses.
How to sell your business?
As mentioned before there is no sure shot methodology that can be adopted in order to obtain the best value for your business. However, we have articulated a list of steps you should consider as they have specifically been designed to alleviate the complexity involved in selling a business.
Each of these steps combined will no doubt help you understand the dexterity involved in the process and will make sure that your business is sold at an appropriate price that encompasses your specifications. These steps are as follows,
- Take some time and make your decision
The very first and arguably the most important step is to first consider if selling the business is a viable option or not. Please do not rush into this decision as many people often regret selling their business when it is too late. Take your sweet time and scrutinize your decision from every aspect before you embark on this difficult journey.
- Conduct substantial research
The second step is conduct substantial research about your business. This means that you will have to harness the power of the internet and other sources to gain substantial insight about the market. Some areas that you should stream line your research towards are mentioned below,
- Current market value
- Check the prices of businesses in your industry
- Check multiple sources to find out the condition of the market
- Evaluate your good will
- Evaluate the different variable factors that may influence your price
- Organize all of your data
This is where it gets tricky, now you will have to organize all of your data in a systematic manner. Not only will this data help your personally, but any potential buyers will require substantial documentation in order to reach their decision. You will have to start from day one and organize all of your data in an effective manner. Some of the documents that you will have to provide to potential buyers are:
- Sales
- Debtors
- Creditors
- Any vender contracts
- Supplier contacts
- Sales forecast
- Financial statements
- List of employees
- Licenses
- Assets
- Use a valuation tool to value your business
Once you have organized all of your data you can finally move on to finding out the value of your business, there are currently three methods of valuation and all three of them might bring different results. We would recommend using all three and then set a price that encompasses all three values, these methods are:
Return on investment method
This is calculated through the formula ROI= (net annual profit/ Selling price) x 100, this method is generally used by most industries and can give you the exact value of your business.
Calculate business assets
- Market value of assets – Liabilities
- Market value of tangible assets + Intellectual property
Find out the cost of starting your business
Another method of valuating your business when selling a business in Grapevine TX is finding out how much it would cost to start your business by scratch, this does not take into account depreciation and intellectual property
Future profits of your business
Finally the last method you can use to determine the value of your business is using precise future profit forecasts, this will also encourage potential buyers as they will be more inclined to buy a business that will be profitable in the future.
For individuals who are planning on selling a business in Grapevine TX, please consider all of the above in order to make sure you sell your business to perfection. If you feel like require more information on selling your business then simply visit Kirksey Business Brokers and trust them to provide answers to all your business needs.