Tips to Sellers:
Staging & evaluating your property
before you list it for sale:
- What do the Numbers Say?
- Look at your numbers
for last (3) years because Buyers are looking to
purchase an income stream and want to see what the business has been doing
for at least the last 3 years.
- Is it trending up or
trending down? Buyers are looking to buy an income stream and especially
one that has an upside to it. They like to find businesses that are well
ran in a good industry and just need a little tweaking to make it more
- What is the Quality of the
- What kind of condition
are the building, the fixtures, and the equipment.
- Have these items been
neglected and possibly antiquated or worn out?
- Is the business current
with all of the governmental codes and requirements? If not what will
it cost to get the business current.
- All of the income generated by
the business been ran through the books?
- Are there personal
items that have been paid by the business that need to be identified so
that the buyer can get a true picture of what the business is generating?
- I would suggest that
you put yourself in buyers position and make a list of the items that
you would be concerned about if you were buying a business to support
yourself and your family. It is a good reality check.
- We are not trying to be
personal on any of these items only realistic for both parties.
- Buyer would like to see a good
reason to sell the business.
- Dont forget to add value in
existing business by using your experience being owner of this business for
a period of time.
You must know about the good and bad factors of your business.
Make recommendations to yourself, what if you change this thing or that,
how it will effect on your business.
- Make list of those
recommendations and work on them (if you can). It could be maintaining an
equipment, fixture or reviewing your agreements and commitments with Venders
If you are not happy with any of your venders, try to get out of their
contracts and replace them with a better one or leave that option available to
the new owner.
If you are satisfied with your vender or supplier, leave a not why?
Try to maintain a performance review of your important venders and
- If you are locked into an
Agreement, Contract or Commitment with any of your suppliers. what options
you have if you are not satisfied with their products or services.
the above listed information you can now use a multiplier to get an idea what
your business may be worth.
For a retail business that would include real estate:-
- 4 to 5 times the net profit to get market value of the business.
Business without any real estate:-
- 1 to 3 times the net profit plus the value of the equipment.
Deduct the risk factors to get realistic value of your business.