Most businesses fall into one of four business categories: Manufacturing, Wholesale, Service, or Retail. Below are some points to consider, based on the type of your business.

When considering the sale of your business, here are some things to evaluate…

Each of these businesses and their sub sectors are valued differently. Strange Transaction Advisory Services has represented businesses in all four categories with success. Over the course of our advisory work we have looked at businesses across a wide breadth of enterprises and have been able to find buyers both strategic and otherwise to fulfill our clients goal in the exit strategy they sought after. We have been able to do this by accurately valuing the enterprises, packaging the data on the company in a professional and accurate form, and negotiating wisely on their behalf.

Some other things to consider:

Well-documented financial statements and tax returns are essential to demonstrate the business earning power.
Steady, above industry norm earnings tend to translate into higher business value.

Detailed written business operating procedures make it easy to understand how the business works, who does what, and what skills are required. Since it is easier to take over a well-organized business, there is higher business buyer interest and competition among them tends to increase the business selling price.

A good marketing plan provides the essential inputs into the future business earnings projections. And accurate earnings projections are key to establishing the business value based on its income.

A look at the customer list quickly shows where the business gets its revenues. Businesses that do not rely on a few large customers for most of their business sales tend to command a higher selling price.

Let’s say that the business enjoys an exclusive distribution agreement with a major vendor, a key competitive advantage. If this agreement can be transferred to the business buyer, the business selling price is likely to be higher.

Skilled and motivated staff is essential to business success. Not surprisingly, if experienced long-term employees stay with the business after the sale, the selling price is likely to reflect it.

Some of the information will provide immediate and useful parameters to determine the business value. Other parts of this data, notably the company’s historical financial statements, require adjustments to prepare inputs for the business valuation methods.

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