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Are you ready to put a fair market value on a business for sale?

On Behalf of | Jun 24, 2020 | Firm News |

Building a business from the ground up takes a lot of focus, energy and investment. You may work for years to establish the company and make it competitive. All of that can eventually pay off if you are able to sell the business for a profit once you have the company well-established.

Much like selling a house, selling a business is a complex transaction with many liabilities and potential risks involved. Getting the right help can ensure that the documents regarding the sale protect you and that you find a proper way to place a value on the company you created.

Pricing a business involves looking honestly at assets and liabilities

The value of your company depends not just on the resources you have acquired, such as machinery and raw materials, but also the liabilities you carry, such as outstanding lines of credit or obligations to continue paying staff members. A balance sheet will show how these assets and liabilities compare.

You will want to make certain easy-to-read documents for potential buyers, like cash-flow statements and income statements, that reflect the current financial circumstances for the business. Looking at everything from discretionary spending to how strong brand recognition and loyalty are with your existing customer base.

Putting a price on your company will require that you look at the operational costs, the current profit margin, the potential future growth of your company and many other factors. You may want to project potential income for the company as a means of giving buyers an idea of what profit they could make from the purchase.