What is Your Business Worth?
There are many factors to consider in valuating a business. There are different approaches used, depending on the size and type of business. Value of businesses of considerable size, are based on the cap-rate which is derived from financial history, actual performance and future expectations. Small business values are mainly based on their financial adjusted cash flow.
There are tangible and intangible assets in a business. The tangible assets, such as equipment, fixtures, inventory and other similar assets are the ones that are the most visual. Attractive interior, well-maintained and clean equipment will contribute to leave a positive impression, while prospective buyers are visiting the facilities. The intangible assets such as the reputation of the business, its customer base and its strengths within its own competitive market, also called "goodwill", are the assets that produce a cash flow.
Other factors a buyer will take into consideration are lease terms or possible ownership of premises, competition, reputation, years in business, industry's outlook for the future, special permits, licenses, terms of sale, and depending on the type of business, location.
The terms of the sale could have a significant impact on the price.
Seller financing will help in obtaining a better price and most businesses are sold with some kind of seller financing.
The Wilson Group will assist the seller in looking for possible ways to add value, by pointing out hidden assets, and help make their business as appealing as possible to potential buyers.
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Confidentiality
We can market businesses for sale without customers, competitors, employees or bankers knowing that it is for sale. Our descriptions are non-specific and only relay business type, annual gross sales, annual owner's cash flow, county or city where the business is located and the purchase price. No business name, street address or any other information will be provided until the prospective buyer has signed a confidentiality agreement. We handle the sale of an existing business with the strictest of confidentiality.
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Negotiations
We
will bring to the negotiation table skills which have been developed
through years of experience, and present your business as effectively
as possible.
All inquiries will be handled in a professional manner. We screen prospects
first, and only after a confidentiality agreement is signed by the prospect,
do we release more detailed information about the business. Next we
will schedule meetings at our office or at our client's place of convenience.
We will guide our clients, step by step, through the negotiation process
in order to obtain the best price and terms.
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Marketing
When
presenting your business to prospective buyers, The Wilson Group has
at its disposal a wide variety of marketing tools.
We
will market your business not only to the local area, but also throughout
the rest of the United States and Internationally. We work with a larger
network of cooperative brokers throughout the United States. We customize
our marketing strategies to your specific needs.
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Seller Financing
Seller financing
part of the acquisition will increase the chance of a successful sale,
it may be helpful in obtaining a better price, and it also demonstrates
high owner confidence in the business. In contrary to the all cash sale,
seller carry back may provide some tax advantages and should be carefully
consulted with a tax consultant. Seller financing makes it also easier
for the buyer in obtaining additional financing by outside lenders.
Often chosen is an SBA loan, which is a Government guaranteed loan and
was created to promote lending to small businesses. SBA loans are now
available to business buyers under very reasonable terms with up to
70 percent financing. Business financing is also available from Equity
Groups and Capital Markets.
With the sale of a business, the seller should seriously consider financing
part of the sale.
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