In this article we will answer the most important questions that arise when selling business.
How to determine how much business costs?
The question of determining the price for which you can sell your business or to buy someone else is probably one of the most difficult. Typically, for conducting medium and large transactions the companies attract professional consultants, small companies often negotiate by themselves. It is possible to assess the business and negotiate about the price quickly, if the parties operate in similar business. Nevertheless, every time negotiations turn into a psychological duel.
The situations where the buyer and seller are unequal become psychologically difficult, for example, when the buyer is larger than the seller in hundred times. In this case, the seller sells generally everything that he has, and the buyer gets just a little grain of sand in the field, and for him the deviation in price in one direction or another will not so important. In the situation where a company enters a new market, for the seller – is an element of survival, but for the buyer – is an element of development. And if the buyer appreciates his business substantially lower than the seller can evaluate it, the transaction is completed successfully.
One of the main factors contributing to the increase in the number of mergers and acquisitions is the increase of corporate transparency. If several years ago it was quite impossible to hold an adequate assessment of business, but now employers is increasingly open financial performance of their activity. Nevertheless, there is the stereotype that it is favorable to hide similar information.
How to increase the value of the company?
The company’s value depends on the level of transparency: the more business transparent, the higher its value.
In addition, the legal security of business has a positive impact on company’s value, so you have to get rid of all the “skeletons in the closet”, as well as to conduct Due Diligence that will allow reducing greatly the risks of restitution of transactions, tax claims, etc. The next steps in the process of raising the cost of business is ordering of the management structure and implementation of corporate information systems, which allow you to control the business at any time. Operations on the public market, issue of bills and bonds also increase the company’s value by 10-20%.
The companies that are not ready to enter the public market of securities must build a brand, a recognizable brand, which will take up to 60-70% of the regional market. This greatly increases the cost of business. In addition, companies that just want to go into a new market prefer to buy an advertised brand in this region, rather than expend great efforts to promote a company unknown to the market.
Business is a dream for many people. But nowadays business has become not only a kind of activities and occupation – it has changed into the article of trade. It is not a rare case today when someone buys and sells businesses just to make money on it. Whereas another part of businessmen sells their businesses because of some troubles or inability to conduct it any more. In any case when selling a business it is better to refer to experts who deal with it. And here business for sale site is of much help because there one can learn much details related with this process. Canada residents are advised to check out toronto business for sale or vancouver business for sale experts.
And remember that before dealing with any issue it is wise to learn some info about it. And today it is quite easy to do as Internet technologies provide you with a nice opportunity to find anything you require.