In this article it is discussed the basic motivations of owners to part with the enterprise belonging to them. The list of reasons is ranked according to the frequency of giving reasons of sales and is based on the statistics of addresses.
1. Unprofitability, the absence of expected profits. The main reason for the sale of enterprises, which was originally built without the proper marketing is an ill-considered idea of business or been driven into bankruptcy by unprofessional owners and managers. These businesses can be built at the beginning on the favorable credit terms or leasing of equipment, on the benefit from lower rents or pay taxes, personal relationships in state structures or simply it was chosen a “fashionable” at that time market niche which then was filled with a huge number of competitors.
2. Sale of non-core assets (for businessmen that have several businesses or holding companies);
3. The emergence of more attractive targets for investment, including mutual funds and funds of investing in real estate. This reason as the second is often claimed by the owners of non-core assets and unprofitable businesses;
4. The change of competitive business environment, the threat of death of the business due to the reasons of strengthening of state regulation of industry or the emergence of new technologies. For example, for these reasons it is sold paging companies, small meat production facilities located in areas planned for construction
5. An urgent need for cash. Often – for the repayment of borrowed funds, rarely – for personal reasons;
6. Fatigue, retirement age, the need to “return” to family and children.
7. Moving to a new residence, including abroad;
8. Frustration in doing business, tiredness of constantly changing legislation, dozens of checks, the impossibility of the medium-term planning. The reason is not very common, but sometimes even a high yield does not compensate the tiredness from the eternal rivalry with the state.
When selling a successful small and medium-sized business, the owner of the company quite reasonably expects to receive a fair price for his business.
Practice shows that only a small fraction of entrepreneurs who have decided to sell his company has an idea of its real value, so the business valuation is an essential part of the pre-delivery. Depending on the purpose of evaluation, there are several types of the cost of an operating enterprise. The purpose of evaluation is to determine the desired value for a particular database. The term “value” will be present in the vast majority of situations. The basis for determining the cost may be reasonable market value, fair value, the value of existing firms, investment value or otherwise, a variety of types of value.
In most cases, when preparing the business for sale it is important to determine its value as an operating company. The cost of an operating company is defined as a whole value, taking into account the contribution of individual assets and components of the company in this business and is regarded as their use value for a particular company and its owner. Objects that are not contributing to overall profitability are regarded as surplus assets. Evaluation of existing enterprise assumes that the business has good prospects for development.
Business is a dream for lots of people. But nowadays business has become not only a kind of activities and occupation – it has turned into goods. It is often today when someone buys and sells businesses just to earn 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 address to professionals. And here business for sale site would be of much help because there one can learn much details related with this process. Those who live in Canada are welcomed to check out toronto business for sale or vancouver business for sale experts.
And keep in mind that before dealing with any issue it is wise to learn some info about it. And today it is quite easy to do as online technologies provide you with a nice opportunity to find anything you require.