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How a Broker Helps

Selling your business is not only a financial decision, it is an emotional one as well. If you have invested your hopes and dreams over time in the creation of your business, handing it over to someone else, even with financial gain, may not be an easy thing to do. Your business broker has been through this process and is familiar with the steps involved. Working with a professional who understands the challenge of change can smooth the process so that you can proceed in your best interest.

rexwalters@comcast.net
Bay Area Strategic Group

SELLING YOUR BUSINESS

Six Key Points
 
Preparing your business for sale can be overwhelming, but ultimately rewarding and profitable. Just like painting, it is 90% preparation. Below are 6 key points to remember:

• Plan ahead. Start at least 6 months to one year before you think you will be ready to sell.
• Get your books, records, and Profit and Loss statements up to date and ready.
• If you have a brick-and mortar storefront or office, clean it up!  Haul out the garbage!
• Get a professional, objective business valuation.  Don’t just guess or fantasize about your listing price.
• Get your equipment list in order, with realistic current market values for major items.

Take a deep, relaxing breath!  Small businesses currently average about 7 months to sell. Yours may take less time…or more.

What is Goodwill?

One of the major issues of concern for small business owners today is, how do I build and value the goodwill of my business? 

The true value of any smaller business, or large business for that matter, is not the break-apart value of its tangible or hard assets.  The true spirit and value of the business resides in the reputation, logo, trademark, lease value, web site, policies and procedures manuals, business plan,  and perceived quality on the part of the customers and community; also known as goodwill.

Trucks, machinery, inventory, human resources, and raw materials don’t make a profit all by themselves.  The organizing controlling, coordinating, planning, and unifying power in the business is what brings everything together and produces the “spirit” of the business that results in cash flow and profit.

From a strict accounting point of view, goodwill is that value over and above what is accounted for by the depreciated value of all the company’s tangible assets such as furniture, fixtures, and equipment.