Business Opportunities Weblog

January 7, 2010 by Angela Shupe | 3 Comments

You can only sell your business once. If that isn’t enough pressure, just imagine what the steps to come will be like. But there is no need to fear! The New York Times has put together a short list of tips that will help you get started, if that is really what you want to do.

First, ask yourself three questions:

Can Your Business Be Sold?

For example, does it have a solid history of profitability, a large and loyal base of customers, a competitive advantage, opportunities for growth, a desirable location and a skilled work force?

Are You Ready to Sell?

Think about what life will be like after the sale. What will you do — not just for money but also with your time? Many business owners suffer real remorse after handing over their business to a new owner.

What’s Your Business Worth?

While there are a number of methods used to value a business, the most common formula for smaller transactions is a multiple of seller’s discretionary earnings (S.D.E.). This type of market-based valuation involves recasting profit-and-loss statements — adding back owner’s salary, perks and nonrecurring expenses — to find the S.D.E. of the business and then using comparable data for similar businesses to arrive at an appropriate multiple.

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Photo by Neubie

In Advice, Business, Selling a Business | 3 Comments