Seller Questions
How do you determine the value of my business?
We offer an opinion of value analysis and in doing so use several tools to determine the value of a business. Most owners have heard of rules of thumb for business multiples. These rules of thumb may be used but there are many other factors that play in the value of the business. CV Business Brokers does a financial analysis and takes into account all the owner’s sales/revenue, net income/earnings, cash flow, and return on investment. Other important considerations are the current business climate, growth potential, and the business readiness for a new owner. The first step is to call us for a free confidential consult if you are thinking of selling within the next year. (760) 797.5780
Is now a good time to sell my business?
Owners have many different reasons to sell including life changes, retirement, moving, or taking on a new challenge. If you are thinking of selling your business, the first step is to get in touch with us. That way we can provide you with some guidance on timing. It is always best to sell when sales and profits are at their best. We appreciate that in today’s business climate that is not always possible. Our goal is to get you the best possible price for your current situation.
How long does it take to sell a business?
Most businesses take between on average between six and twelve months to sell. Every business and market is different. Our experience indicates that having a realistic sale price is the most important factor in generating interest and finding a qualified buyer. The local market, time of year, industry and type of business and the seller having solid documentation and organization also play a significant part in closing a deal expeditiously.
Why should I use a business broker?
Using a business broker ensures that you focus on running your business while you are trying to sell it. A business broker can give you an honest opinion of value, create a positive profile/term sheet, effectively advertise to buyers and negotiate a positive deal for all parties. Also, it is very difficult to maintain confidentiality and objectivity without the assistance of a business intermediary. Sellers often times struggle to screen buyers and in turn waste their valuable time with buyers who are not qualified to purchase the business. As a business intermediary, it is my job to bring screened buyers to the seller and move the buyers through the buying process, managing the exchange of information on both sides, as efficiently as possible.
How can I increase the value of my business?
Valuation is a different in different buyers’ minds. Some buyers who are in a similar business and looking to expand may see your business as less valuable than a buyer who is buying his or her first business. Nonetheless, there are several key things a seller can do to maximize the value of their business.
1. Have a record of profits and growth
2. Have excellent, preferably automated, financial and accounting records
3. Have a database of customers
4. Show the longevity of the business and its market position
5. Have good vendor relationships and favorable lease agreements or include real estate if applicable
6. Have a solid roster of employees who are willing to stay
7. Have a willingness to provide seller financing
How can I get started getting an opinion of value and analysis of my business?
The very first step is to call us at (760) 797-5780 and we can discuss your particular situation. Also, in order to give you an opinion of value and solid assessment we typically need the following information. We will sign a confidentiality agreement with you in receiving this information.
1. Three years financial statements and tax returns
2. History of the company, brochures, promotional materials
3. Equipment with fair market value is possible
4. Good estimate of inventory value
5. A copy of lease agreements, franchise agreements if applicable, and any ongoing vendor or dealer agreements.