Owners with plans to sell their businesses and retire could benefit from taking certain steps when they prep their enterprise for a sale. As noted by Business News Daily, you may wish to consider obtaining a professional valuation of your business’s worth.
With a professional appraisal, sellers may ask for favorable prices that reflect their businesses’ true market value. By offering an enterprise at what might reflect an unrealistic price, however, an owner’s retirement exit strategy may run into delays. Negotiations with prospective buyers could become lengthier than expected.
Different valuation methods may result in varying prices
Professional evaluators may use different methods to calculate a business’s fair market value. Based on the technique used, one calculation may produce a higher market value than another. Business owners may consider obtaining more than a single appraisal.
A common valuation procedure begins with a comparative analysis. In this appraisal method, an evaluator reviews a business and compares its metrics to its competitors’ figures. Analyzing precedent transactions reflects another method. This calculation takes into account recently sold businesses offering similar products or services.
Experienced employees may qualify as ready and suitable buyers
When considering their business’s future leadership needs, owners may look for buyers suitable for servicing their customers. According to Kiplinger’s Small Business, selling an enterprise to its employees may offer owners a smooth exit strategy. The sale could also help bring about the enterprise’s continuation.
Employees purchasing a business may require training or mentoring to run the enterprise on their own. After the sale, the new owners may wish to retain the former owner until the new leadership team takes on full control of the business.
