We make it easy for clients interested in selling their business to connect with the right buyers through our esteemed network of private and institutional lenders. Our team of experts make the process as smooth as possible by providing guidance to the clients on how to sell a business.
The following are the benefits of selling a business through us:
- We guide you every step of the complex way especially if you do not have enough experience in selling a business
- We are able to put you in contact with the best buyer
- We have a long standing history of successful company sales and thus are able to predict future implications of a transaction
You get to speed up your business selling process by collaborating with Us!
Assessing Your Company Value
Despite us working with you to sell your business, the amount of money the business will be sold at depending on its value, location and environment of market. One of the first steps in the sale process is determining company valuation that is made possible by getting accurate to the following questions:
- What are your historical sales and future projections?
- What are your profit margins?
- What are your tangible assets?
- How strong is your customer base?
- How stable is your growth?
- How efficient are your business operations?
- How do you perform compared to your competitors?
- What risks do you face?
The information obtained greatly influence the amount at which the client can sell the business for. It is thus important to be honest with the potential buyers by telling them why one is selling their business. Our advice is to always plan an exit strategy early so that the process is smoother along the way.
Ways of Maximizing Value When Selling a Business
Selling a business is influenced by the factors outlined below:
1. Timing
It is ideal to sell one’s business at a time when their profits have been on the steady increase. A business that is still growing or has products still in their early cycles of life is more attractive to the potential buyers. It is important to know when to sell a business and our team does an exceptional job in providing the client with the details of their business to help them figure out what time is best to make the transaction. Long waits can harm and reduce the company value and more so where legal actions have been taken.
2. Income and Customer Diversification
It is very risky to have one stream of income even if your company specializes in a specific product or service. Multiple income streams put you in a better bargaining position when in the process of selling the business. Proprietary products that have a strong brand, patent or trademark increase the company value significantly.
Contact us and maximize your company Value!
It is important to have a range of products with no one product making up more than 15% of the sales when looking at revenue sources. A diverse customer base is also valuable with no one customer making up more than 10% of the sales.
3. Operational Efficiency
Investors place great emphasis on the efficiency with which a business is run. You can optimize your business operations in a number of ways such as updating software, automating tasks wherever possible and improving the processes of HR. It is easy to command a higher price for your business if things are run smoothly.
4. Clean Books
Providing clear, sufficient and detailed financial information to anyone that has an interest in your business is paramount. The value of your business increases when you have organized financial records, a good credit history and sorted taxes. You are also in a stronger position when your financial ratios are near or above the industry average, competition is weak and your company commands a healthy share in the market.
5. Planning for the Future
Making preparations for market changes is essential just as it is to provide accurate current information concerning the business and a detailed plan for growth. Having a strong management team that plans ahead and prepares for different scenarios is imperative to the successful operation of a business. Investors are interested in the direction your company takes, possible launches of new products, plan execution and how much profit your business can gain or increase.
The following factors can possibly decrease the value of a company and thus it is well to understand them just as well as you understand those that can increase company value:
- Products similar to those of competitors
- One or few customers make up more than 25% of the sales
- Strong competition while your company sits at a weak position with a declining market share
- You have products that are near the end of their product life cycle
- One product makes up more than 20% of sales
- There is need for investment to either build or acquire equipment
- Pending legal or government action
- Financial ratios below the industry averages
Preparation involved in the selling of a business
Our financial experts help you conduct due diligence that is necessary to ensure your company is fit for sale once you have been matched with the right buyer. Kove handles the documentation of business strategy, getting financials, providing detailed information concerning employees and ensuring IT systems are updated. This information is presented in a clear and concise manner to the buyers for their approval. It is vital that both sides be open about areas they feel need improvement on the business in order to maintain transparency and trust throughout the entire process.
Contact Us to Discuss How to Sell a Business
Selling a business is a complex and involving process and that is why we are here to help you figure it all out. Contact Us and Let’s Talk About It!
