For owners of small companies there are several ways to exit the business: – closure of the company with the sale of assets at liquidation value’ – the transfer of the management to the hired management; – sale of the company as an operating business.
Sales of existing business – is the most correct solution for owners of successful companies. The sale allows us to obtain not only a fair price for existing assets, but also an award for operating business, which may exceed the value of assets at times. In addition, the business founded by former owner finds a new life because a buyer who offered the maximum price almost always serves as a successor and is committed to the development and growth of the company. In most cases, the money proceeded from the sale of the business is invested in the development of new business, contributes to economic growth and further development of the market sales of existing enterprises.
In order to understand what exactly these companies are, it is necessary to decide on the very concept of “small and medium businesses.” The most active sites of the market sale of operating business are the companies worth from a few thousand dollars to 10.5 million U.S. dollars. Conventionally this group can be divided into three subgroups:
1. Very small companies (LLC, JSC) and private entrepreneurs (unincorporated business). The maximum cost of such companies rarely exceeds 100-150 thousand dollars. This is small enterprises of trade and services, catering, brokerage firms, small operators, handicraft production. The main distinguishing feature of such enterprises is that the base of the economic attractiveness of the possession of business is to provide employment for his master. Doing your own business is associated at its owner with the possibility of capital accumulation, providing work for family members, the possibility of implementing the skills and talents. The main concern of the owner is a question “how to do” as opposed to the question “who to entrust.”
2. Companies that take place the “golden mean” are the most interesting from the standpoint of evaluation of methods and sales. They can be called “the workhorses” of small business with full confidence. Compared with enterprises from the first group they are generally more difficult in management; require a greater volume of business skills and experience, ability to manage a much larger number of most diverse processes and the large number of employees. The nature of such enterprises is the management of the company (often using borrowed funds) through a variety of instruments, with intensive use of the skills of the owner or manager, capital, new ideas, modern equipment, qualified and experienced personnel.
3. Companies that grew out of “family” ones, strengthened and tending to rise due to the development of new products and access to foreign markets. Due to the secrecy business, opaque accounting, the absence of well-built business processes and access to “long” money risks when buying such companies are quite large that adversely affects their value. The range of value here is quite blurred and may range from 1 to 10 million dollars, and sometimes higher. It is for these companies the sale to a strategic investor is often the only chance to move into the category of medium-sized businesses or corporate entities.
Business has always been a dream for lots of people. But nowadays business has become not only a kind of activities and occupation – it has changed into the article of trade. 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 refer to professionals. And here business for sale site would be of much help because there one can learn much details related with this process. Canada residents are welcomed to go to toronto business for sale or vancouver business for sale experts.
And remember that before dealing with any issue it is smart to learn some info about it. And today it is quite easy to do as web technologies give a nice opportunity to find anything you require.