Helping You Sell Your Business: The Power of Numerico
The Importance of a Business Valuation
Many business owners dream about an exit without knowing the actual value of their establishment. A business valuation is important to know when helping you sell your business because the buyer and seller in any deal need a fair representation of what an enterprise is worth to inform the negotiation process.
Without knowing how much your business is worth, there’s a risk of underselling or pricing out legitimate prospective buyers.
Business valuation goes beyond your cash flow or balance sheet. The true value of your enterprise may encapsulate other variables such as future earnings, insurable value, capitalized earnings, and much more.
The right valuation approach will vary from one business to the other. Numerico’s small business accounting service unearths the real value of your brand when helping you sell your business. We consider the unique aspects of your enterprise, helping you close a favorable deal for all parties involved.
How To Increase Your Business Value
Here are some tips to increase your business value before a sale.
Get Advice and Complete Your Valuation:
An experienced business planning and evaluation expert, like Numerico, will give you a clear understanding of your enterprise’s worth. You’ll receive expert advice to increase your chances of getting a sale right.
Grow Your Profits:
Businesses at breakeven don’t receive the highest offers. To demonstrate profitability and sound business health, you need to show a healthy amount of retained earnings on your balance sheet.
Reduce Expenses and Increase Sales:
Analyze your business processes to find ways to control inventory, reduce costs, and increase operational efficiency without upsetting your operations. Go over your marketing plan to find new ways to tap into new markets or leverage existing ones to boost sales.
New products and services or a diversified customer base generating recurring revenues will increase the value of any business.
Factors That Influence a Business Sale
The top factors that influence a business sale include the following.
Revenue and Profitability:
These metrics have the most direct effect on the final sale price of any business. If your exit is still a few years away, you need to focus on maintaining a healthy number in these areas.
Business Scalability:
A business with strong scalability potential will attract more buyers. Highlighting all the possible new ways to grow the business and the availability of a growth strategy can swing the final sale price.
Timing:
Selling a business is a time-intensive process. Before embarking on the process, you need to prepare. Any interference (from life events, or other factors) can push the sale back by months.
Similarly, you should time your exit to avoid periods of market uncertainty, economic downturns, and other factors. Such periods lead to a buyer’s market.
Transferability:
A business with difficult transferability will scare away potential buyers and may limit the selling price. A business with more organized operational information and the willingness to onboard new owners will receive more favorable offers.
Tips For Preparing Your Business for Sale
Here are some tips for preparing your business for sale.
Work With a Business Valuation Company:
A CPA firm, like Numerico, offers consulting and advisory services, bookkeeping, business valuations, and tax strategies to small businesses in various stages of their lifecycle. When helping you sell your business, we provide an objective view of your business’s worth and its true profitability.
Buyers will need to review at least three years of professionally prepared financial information. We’ll help you get your books in order. We have access to national data for transactions in various industries and experience in selling businesses in many industries.
Put Your Best Foot Forward at all Times:
Prospective buyers may drop in unexpectedly. You should ensure they see orderliness when they arrive. A disorderly front office doesn’t speak well about your back-room operations and management.
Arrange all Legal Paperwork:
You need to keep all legal paperwork up to date and readily available. These include your vendor contracts, licensing agreements, permits, incorporation papers, and more.
Helping You Sell Your Business | Michigan CPA | Numerico
Attempting to determine the true value of your business may lead to costly mistakes, inaccurate results, and missed opportunities. At Numerico, we help small businesses understand their company’s worth.
When helping you sell your business, our experts will take the time to cover all the unique angles of your business processes to make sure you get the best value for your business.
Contact us today at (313) 278-8030 to schedule a business valuation consultation.