Potential buyers will be looking for detailed information about your business’ operational and financial health. What to prepare for selling your business For larger companies, try as they specialize in selling companies with $1M to $25M in yearly revenue. Small deals (under $1M in revenue) might be best to use a service like. Who is the best broker to sell my business? This depends on the size of the deal. Some of the most attractive industries currently receiving high valuations are service companies, logistics and transportation, property management, home services and technology. However, the differences come into play when assessing valuation across industries. What type of business is the best to sell? Businesses in all industries can be sold. This option can be presented to your business partner, employees, competitors or someone in your network. One of the best ways to sell your business fast is to offer it to someone with no up-front payment and an earnout based on performance. How can you sell your business quickly? You can sell your business quickly by having it priced correctly and with the right terms. At Business Exits, we average about 7 months to close a deal. How long does it take for a company to sell? Generally the larger the deal, the longer the time frame it will take to sell a business. If it is making a lot of money, the price will be a multiple of EBIDTA. If it is making a little bit of money, the price is based on a seller’s discretionary earnings. It you are making no money, the price is based on the value of the assets. How do you price your business for sale? You price your business for sale depending on how much money it makes. That being said, a business is generally worth a multiple of the earnings, which means a value applied to the profit of your business. How much is my business worth? You can sell your business for what the market will pay and it is the buyer that determines the price of a business. Time to celebrate! Sign the final contract and begin the handover transition. Let the buyer perform due diligenceīuyers generally receive 60-120 days to verify a business’ financials and validate that all the information presented is accurate. Receive offers from buyers and negotiate the best one based on your expectations around price and other important factors. Market your business to strategic buyers seeking to acquire a company similar to yours.
This is the document that clearly and concisely summarizes the key points of your business’ operations, mission, management, products or services, competitive advantages and financial data to provide an overview that will help a buyer compose an offer. Develop the executive summary of your business Find a broker or investment bankerĭepending on the size of your deal and factors such as industry, revenue and potentially having unsolicited offers on the table, most companies will garner a higher valuation when they work with a banker or broker who can bring strategic insights to the process. Prepare your financials with your accountantīecause a business is valued on its’ profit, thorough and accurate financials are essential, including preparing an adjusted profit and loss statement to present to buyers. Smaller businesses (under $3M in price) generally average 2-3 times profit, medium-size businesses ($3m to $20m) can bring in 3-5 times the profit and large businesses ($20m and over) will often see 5-10 times the profit. Depending on the size of the deal and the industry, that can range from 2-10 times the profit. Determine what your business is worthĪ business is generally worth a multiple of its’ profit. Make selling your business easy with these eight steps. The objective is to get maximum value and in order to do this, it’s imperative to work with a broker who can follow a process that ensures smooth and organized steps to fulfill the business’ ultimate sales potential and find the right buyer from both a financial and relationship standpoint. You’ve spent a lot of time, effort and equity into growing your business and have decided it’s time to sell.
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