When you are selling a house or a commercial building, there are several things to consider when thinking about the right price to ask. You would get a real estate agent and they would help you find the appropriate market value and then adjust that based on the condition. A home inspection will help in this adjustment, but after that, it is fairly straight forward about setting the price. When you have to consider a different question, such as how to determine your business selling price, it is more complicated.
Just to sell the building and property, it would be fairly easy. The market value can be determined through an agent and talks can begin to set that price. The selling of the whole business, however, has many more components in it. You need to account for the building, the name or reputation, the stock still sitting on shelves or at remote locations. All of this and much more must go into the computation.
The building, again, is easy to figure out. The stock on the shelving, including any materials to be used to build products, must be looked at and current replacement value must be listed. This can be provided by looking at the price sheets you have from current vendors. Add this to the value of the building.
The liabilities you currently have will have to be added up. These are those legitimate bills and invoices that have not been paid yet. These are accounts payable for the business and will have to be assumed by the new owners, so they have to be listed as an offset to whatever positive value you have listed.
You will then include all of the current accounts receivable you have on the books. These represent future payments that the new owners will be receiving based on the work you have done. These will be classified as to how sure you are that they will, indeed, be paid. These represent value to the buyer and must be listed so they know what has been happening and are very valuable to the computation of the price you are asking.
One of the things you may not think about is the value of the business name. This is called good will and is listed as an asset. The reputation you have built, over time, is valuable. Much of the actual value of your business is there. In other words, the potential for the new owners to succeed can be attributed to the name that people have grown to trust.
Gathering all of the information you need and compiling it properly can take some time and a lot of head scratching. That is why contracting with a company that does this will be the best course of action. They know the questions you need to hear to help locate all of the information this important part of selling your business requires.
You are looking to sell a business, a living, hopefully, thriving entity. You are not just looking to sell an inanimate object. You need maximum profit and you need a quick turnaround on this project. You want to know what goes into the valuation and how to arrive at that special asking price. For this, you need the experts who know what is the right set of things to list and how to list them.
Just to sell the building and property, it would be fairly easy. The market value can be determined through an agent and talks can begin to set that price. The selling of the whole business, however, has many more components in it. You need to account for the building, the name or reputation, the stock still sitting on shelves or at remote locations. All of this and much more must go into the computation.
The building, again, is easy to figure out. The stock on the shelving, including any materials to be used to build products, must be looked at and current replacement value must be listed. This can be provided by looking at the price sheets you have from current vendors. Add this to the value of the building.
The liabilities you currently have will have to be added up. These are those legitimate bills and invoices that have not been paid yet. These are accounts payable for the business and will have to be assumed by the new owners, so they have to be listed as an offset to whatever positive value you have listed.
You will then include all of the current accounts receivable you have on the books. These represent future payments that the new owners will be receiving based on the work you have done. These will be classified as to how sure you are that they will, indeed, be paid. These represent value to the buyer and must be listed so they know what has been happening and are very valuable to the computation of the price you are asking.
One of the things you may not think about is the value of the business name. This is called good will and is listed as an asset. The reputation you have built, over time, is valuable. Much of the actual value of your business is there. In other words, the potential for the new owners to succeed can be attributed to the name that people have grown to trust.
Gathering all of the information you need and compiling it properly can take some time and a lot of head scratching. That is why contracting with a company that does this will be the best course of action. They know the questions you need to hear to help locate all of the information this important part of selling your business requires.
You are looking to sell a business, a living, hopefully, thriving entity. You are not just looking to sell an inanimate object. You need maximum profit and you need a quick turnaround on this project. You want to know what goes into the valuation and how to arrive at that special asking price. For this, you need the experts who know what is the right set of things to list and how to list them.
About the Author:
If you would like to know how to determine your business selling price come and discuss this further with one of our expert brokers. Find our website that discloses all the info on http://www.businessbrokerexpertsinc.com/steps-in-selling.
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