Selling one’s business is a serious and crucial financial decision any entrepreneur needs to seriously consider. It can be a devastating and traumatic experience for anyone to give up everything he has worked hard at.

Before deciding on selling your business you might want to consider what are the reasons for doing so and who will be affected by the sale of your business.

Here are some of the reasons that entrepreneurs want to sell:

• Death, disability or serious illness can have an impact on your ability to continue
• Relocation of your family to another area , town or even country
• The business isn’t generating sufficient income for your need
• Personal reasons such as death in the family or divorce
• You have received an excellent offer that is just too good to turn down
• The business is losing money
• You wish to change careers and do something different.

How to go about selling your business?

Specify exactly what is being sold  , what assets and liabilities are included in the sale Use the services of  professionals such as accountants and lawyers. You may want to get the help of a professional to assist you in the complex selling process. Hiring a professional valuator, business broker or even a lawyer to assist you with the sale can make the process a lot easier and help you obtain a better price.Plan the sale carefully so that you are able to present the business in a favorable light.

Two factors important in the sale of any business would be finding willing buyers and sellers and agreeing on a fair price for the business. Selling any business is largely defendant on marketing  marketing. There is a need to properly position the  business in order to attract interested buyers.

Using Business Brokers To Sell The Business

Hiring a professional to help you out in selling your business is easier than selling by yourself. Since selling a business is a complex process, asking for assistance would be a pretty smart option for you.

Advantages of using a broker include,

• They have access to a network of qualified buyers who are seriously willing to buy
• Assist with the preparation of contracts and legal documents
• Provide a valuation of the business
• Provide valuable advice that facilitates the sale process

The role of an intermediary broker is crucial in the selling process of the business. They act as the middle man between the seller and buyer. They help sellers to find potential buyers and negotiations with them.

How To Value Your Business?

Valuation of business worth are frequently complex and a number of methods are used in doing so. Employing experts like financial advisers makes the process a lot easier.

There are a number of ways to value your business. The most common would be discounting future cash flows and valuations based on multiples of future earnings.

Asset business valuation – is usually used if your business is not profitable and is sold in liquidation. It measures the worth of your assets including equipment, inventories and real properties less any liabilities. It is the easiest method of valuing a business and is commonly used.

Discounted cash flow – An estimated based on discounted future cash flows to determine the present value of the business operations. It is fairly complex and the most accurate method as any business is only worth its ability to generate cash and profits.

Market business valuation – compares the value of the business to prices obtained for similar businesses. Similar to the method used by estate agents to value a property. Typically used for small business – it is fairly subjective.

Earnings based multiple – also termed as earnings business valuation. This method determines the value of your company based on historic earnings. Companies with strong intangible assets usually use this type of method for valuing their business, however it does not differentiate worth of tangible and intangible assets.

The factors that affect the value of your business consist of its ability to generate positive cash flows and profits plus certain external factors like state of economy and market the business is in. Obviously if a number of interested buyers are interested in buying then you will be able to get a premium over the valuation.

Most entrepreneurs will at some point be faced with the decision to sell the business – ideally you should have your exit strategy in place when you start off your business.