Blog for Business Buyers and Sellers

If you’re a serial entrepreneur, then you may already be familiar with the benefits of buying an existing business.  But with a slower-than-expected economic recovery, it is wise to proceed cautiously when searching for an existing business. 

The ability to see an opportunity and seize it at the right time is a skill that has made many entrepreneurs rich, with many an empire being built by strategic acquisitions of synergistic businesses.  However, with the rise of online business directories, the best businesses are often snatched up before a business broker even finds out about them.  Staying ahead of these trends and finding the best deals on existing businesses requires keen intuition and skill. 

The current job market is forcing many Americans to look at other options for earning a living, and many of them are turning to business ownership instead of another unfulfilling job in corporate America.  Perhaps you’ve always had a talent for selling or repairing appliances, or you’re ready to try something new.  A retail home appliance business may be the opportunity you’ve been waiting for.  But how does one go about finding a business like this for sale?  Short of hiring a business broker, the Internet offers a variety of resources that connect buyers and sellers in an FSBO business directory. 

No matter where you live or what type of business you are in, there is always wisdom to be gained from speaking with a tax professional – especially when it comes time to sell your business.  Sure, there is plenty of sound advice available on the subject of “tax considerations when selling a business”, the best way to avoid a surprise tax bill is to speak directly with a professional business tax advisor. 

That being said, there are some basic ideas to consider when you structure your sale, since you never know how quickly things will progress with an interested buyer. 

When it’s time to sell a business and place a realistic monetary value on it, a businessperson will often consult a business valuator, or try to figure it out themselves using business valuation formulas.  But however one may try to figure it out, there is no clear-cut answer to the question of how much a business is worth.  Volumes of books have been written about the subject of “How to Evaluate the Value of an Existing Business”, it would be hard to find more than one expert who arrives at the same price.

So how do you arrive at a value for an existing business?  Some of the more commonly accepted rules and techniques are outlined below.

Selling an existing business is considered an art form in some circles.  Entrepreneurs have found creative ways to make their businesses seem more valuable to potential buyers while keeping their P&L statements low enough to avoid high tax liabilities.  But one thing all business brokers agree on is this – the best advice for selling an existing business is to price it correctly from the start. Of course, there are dozens of other tips for selling your existing business, which are outlined below, but focus on the price first and the rest will quickly fall into place.

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