Begin The Begin
If you’re considering selling your business, you know that it’s a major decision that’s right up there with getting married or buying your first home. It’s easy to get overwhelmed with all the tasks required when evaluating, valuing, pricing, listing, marketing, and negotiating the successful sale of your business for a great price and on excellent terms. The good news is you don’t have to go at it alone.
What’s It Worth?
One of the essential tasks when considering selling your business is accurately identifying, cataloging, inventorying, and valuing all of your business assets. Knowing every single component and asset of your business and documenting it is a significant first step essential to evaluating and valuing your business in its totality.
Can You Touch It?
Tangible assets are physical assets that can be seen and touched and include the following:
- Real estate. This includes all owned property, land, offices, warehouses, factories, and leased premises.
- Equipment and machinery include vehicles, computers, office furniture, fixtures, copiers, etc.
- Inventory can include all raw materials, work-in-progress, and finished goods.
You Can’t Touch It
Intangible assets are all non-physical assets that contribute to the value of the business. They include the following items:
- Intellectual Property includes trademarks, patents, logos, copyrights, and trade secrets.
- Branding includes reputation, customer loyalty, reviews, and brand recognition.
- Contracts and agreements include client, supplier, distribution, and licensing agreements.
- Software and technology include proprietary software, databases, websites, and domain names.
- Goodwill is the intangible value of customer relationships, brand reputation, and market presence.
The Money Game
Financial assets include the financial aspects of the business.
- Cash and cash equivalents are the monies in bank accounts, petty cash, and short-term investments.
- Accounts Receivable are the outstanding payments from customers.
- Investments include stocks, bonds, and other investment holdings.
- Intellectual property royalties are the income from licensing or selling intellectual property rights.
- Insurance policies are existing policies that can be transferred to the buyer.
Human Capital
Human capital includes your employees’ skills, expertise, and knowledge.
- Key employees are your most valuable personnel crucial to the business’s success and continued operations under a new owner.
- The management team comprises experienced senior executives who can lead the business after the sale.
- Employee expertise resides with people with specialized skills and knowledge.
Customer Base and Contracts:
- The existing customer base is the number and quality of current customers.
- Customer contracts include long-term or recurring contracts that provide a predictable revenue stream.
Smooth Operator
Operational Assets can include the following assets:
- Processes and systems are efficient and well-documented operating procedures.
- Licenses and permits are the required licenses, permits, and certifications for the continued legal operation of the enterprise.
- Supplier and distribution networks are established relationships with reliable suppliers and distribution channels.
Financial Performance
- Revenue and profitability are historical financial statements showcasing revenue, net income, and profitability.
- Growth potential is the business’ prospects for future growth and expansion.
- Cash flow is considered the consistency and predictability of cash flow generation and is a major part of every business sale.
These assets will vary depending on the nature of the business, and it is essential to accurately and thoroughly assess and document them to determine the business’s overall value and negotiate a fair selling price.
You’ve Got A Friend
Selling your business on your own can be a very challenging and daunting endeavor. Hiring an experienced professional business broker can help you navigate this significant undertaking and make the best choices that protect your interests and maximize your profit.
Eric Wayne, a professional Florida-based business broker, has helped hundreds of business owners like you sell their businesses for top dollar and avoid costly mistakes and frustrating delays. He can help you sell yours. Eric’s been there no matter what size, type, or asking price; he can sell your business for top dollar and fast. We help you with everything from asset valuation to finding qualified buyers to closing the deal.
