As a small business prepares to sell to another company, owners must consider a wide range of factors that make up the company’s worth. A business’ assets are its primary indication of value.
There are two different kinds of assets: tangible and intangible. Tangible assets include equipment, machinery and various physical items that can be readily transferred into cash.
Intangible assets cannot be directly converted and include trade secrets, industry know-how and employee relations.
Nonetheless, both kinds of assets are vital in estimating the value of a company. If the transfer or sale of assets is a part of a business’ agreement to be bought by a larger company, the selling business must acquire a written agreement that documents the allocation of assets.
Sometimes, intellectual property rights are involved in asset transaction. This usually involves a higher degree of legal involvement and should be delegated to such authorities.
Businesses often overlook the value of their assets, especially intangible ones, but they are also part of a company’s overall worth and should be paid due attention.
Showing posts with label selling a business. Show all posts
Showing posts with label selling a business. Show all posts
Friday, October 15, 2010
Friday, September 10, 2010
Steps to take when selling a business
Whether owners are planning for retirement or looking for a new challenge, selling a business requires a few simple preparation steps to help with the process and increase the value.
The first step is obtaining a business broker who can help estimate the value of a business as well as search for potential buyers, writes Tim Skarda, a consultant with Allied Business group, in the Kansas City Star. Certified professional accountants, brokers and lawyers can have a big impact on the value of a business and the tax implications.
Business owners should also make themselves an unnecessary part of the equation in order to persuade potential buyers that the business model is sound and can be transferred to a new owner. Additionally, expanding a customer and product base will show that a business is not reliant on a single large account.
Automating financial accounts and having transparent reports available for brokers and possible buyers will help speed up the process. Skarda recommends eliminating any unnecessary businesses expenses or deductions, such as travel, that can affect the profit margin.
Misrepresenting a company’s finances and a lack of preparation are listed among the most common mistakes business owners make when selling a business, according to Entrepreneur magazine.ADNFCR-3727-ID-19937277-ADNFCR
The first step is obtaining a business broker who can help estimate the value of a business as well as search for potential buyers, writes Tim Skarda, a consultant with Allied Business group, in the Kansas City Star. Certified professional accountants, brokers and lawyers can have a big impact on the value of a business and the tax implications.
Business owners should also make themselves an unnecessary part of the equation in order to persuade potential buyers that the business model is sound and can be transferred to a new owner. Additionally, expanding a customer and product base will show that a business is not reliant on a single large account.
Automating financial accounts and having transparent reports available for brokers and possible buyers will help speed up the process. Skarda recommends eliminating any unnecessary businesses expenses or deductions, such as travel, that can affect the profit margin.
Misrepresenting a company’s finances and a lack of preparation are listed among the most common mistakes business owners make when selling a business, according to Entrepreneur magazine.ADNFCR-3727-ID-19937277-ADNFCR
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