Business:
selling & purchasing
Business: selling & purchasing
Buying a Business
Are you thinking of buying an existing business?
Your first step have to be the research: what’s the Company’s viability. It’s worth purchasing?.
There are some questions to be asked that will give you a clear picture about the business you’re interested in.
Your first question has to be why is this business for sale, and what’s it’s history.
Looking into the future what’s the outlook of the business and the economic field where it works.
Due diligence is the name of the game.
Financial considerations for buying a business
There are many questions to be asked but let’s talk about some of them.
You need to ask for audited year-end financial statements (balance sheets, income statements, and cash flow statements) for the past three years, and tax returns for the same period. That will give you an idea about the company’s financial status.
What current debts does the company have? Are there any liens against the business?
Are a substantial percentage of accounts past due?
Legal
Check about lawsuits (ongoing or in the past).
Zoning or industry regulations affecting the business.
Contracts in place and their term.
Market
There’s a list of basics points to be covered, like:
Target market: it’s growing, stable, or shrinking?
Market share
Competitors
Sales & Marketing: sales history and projected sales. Marketing channels.
Assets
Real Estate
Intellectual property
Proprietary processes
Exclusive products
Patents
Mortgage or lease involved.
Equipment.
Reputation (including online reputation)
Licenses, permits, certifications.
Suppliers
Who they are and contract in place.
Inventory levels.
Employees
How many employees.
Wages and industry average comparison in the local marketplace.
What are their benefits.
Key employees, duties, positions, and years working with the company.
Company culture.
Union.
SELLING A BUSINESS
Are you thinking about selling your business?
Selling a small business is a complex venture that involves several considerations, and requires careful planning
Basic Steps to sell your business
Make sure your business is ready to be sold.
Plan in advance (at least one year). That will give you the opportunity to improve financial records, customer base, and other factors to make the business more attractive.
Determine the value of your business.
Organize your financial statements and tax returns dating back at least three years.
Optimize your structure and organization. Costs, inventory, among others.
Have an appraisal done which will give a buyer a solid document about the value of the business.
Are you thinking about selling your business?
A Commercial broker may be able to negotiate a deal that is better for you than the one you would have arranged by yourself.
Be sure to know the risks of selling on your own.
As a business broker I’ll perform the business evaluation, prepare a prospectus and work with a large network to locate buyers, including listing the business with suitable marketplaces, and applies a background in deal-making to get the best price.
The hardest part of the business deal is going through the due diligence. That’s where my experience provides the most value.
Selling a business cab be overwhelming, and for certain an emotional venture.
Contact us, we can help!
6 steps to sell a business
Selling a small business is a complex venture that involves several considerations, and requires careful planing. Here are 6 basic steps you need to follow.
