The seller often estimates the value of his business according to the cost of tangible assets. But the cost of fixed assets can often significantly – by several orders of magnitude – exceed the real value of business – subject to availability of poorly trained staff in professional terms, debts, when the line of activity of the company is unpromising or when fixed assets are worn out. If there is a lease agreement, it is desirable during preparation for selling to upgrade them, as well as datasheets, certificates and licenses. Then you have to spend spot advertising. Loud advertising, especially in the press, is simply unacceptable. Nobody, especially competitors, do not have to know that the firm is being sold. In order to make spot advertising, one must know the market, prospective buyers in the industry, investment companies, and in person interest them by your proposal. A well-written policy note or a well-developed proposal for the sale can help in it.
A policy note – is a very important document when selling. You must be able to emphasize in it the strengths of the business, to try to gloss over the weak, but so that the seller in the future cannot be accused of hiding some important information. It should be said about the weaknesses, but if possible, to describe the ways of their elimination, having reinforced them by financial calculations, show the possibility of solving problems. You can always find a buyer: the main thing is to organize the sale and get interested the person who has money, but now many people have money.
Business valuation – is an extremely complicated issue. Now there are three main approaches to business valuation: cost, market (or the comparison method) and evaluation on the basis of income. In the cost approach it is prevalent the method of net assets. With proper consideration it gives the most real picture. All the assets and liabilities are taken: tangible and intangible investments, promissory notes, shares, payables and receivables and so on, and they are valued according to fair market value, which has usually nothing to do with the data of the balance sheet. Every item is recalculated in such a way. Stocks in the warehouse – is easily implemented or difficulty implemented, depending on it is determined the price. The same goes with receivable -if the debt is hanging three or four years, the chance to get it is greatly reduced, hence, the real value of it decreases. The same with accounts payable – well, if there is a long-term contract governing it. Having calculated the cost of all assets and all liabilities, we find the value of net assets or equity. This is approximately the amount for which you can sell a business. It is commonly used the method of comparing – when a business is compared with the sold analogous company.
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 often 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 address to professionals. And here business for sale site would be of much help because there one can find much details related with this process. Canada residents are welcomed to visit toronto business for sale or vancouver business for sale experts.
And keep in mind that before dealing with any issue it is wise to investigate it. And today it is quite easy to do as online technologies give a nice opportunity to find anything you need.