Buying a Business: How to Value a Small Business That's for Sale

Buying a business

How to value a small business for sale?

Buying an existing business can yield big rewards. The more market value a business has the better.

Discover how to value a small business that's for sale.

Starting a business from the ground up is a major undertaking without any guaranteed success after all that hard work. In fact, once opened, only about 20% of businesses survive their first year. This statistic is both staggering and disheartening.

Instead of swinging for the fences and shedding blood, sweat, and tears in the hopes of getting a business to profitability, you can ensure success and profitability by purchasing a business instead of starting one.

You might be wondering how to go about putting a dollar value on an active, profitable business.... There are certain ways you can go about that and make sure that you're investing your money in the right places.

Keep reading to learn how to value a small business that's for sale.

1. Assess the Business Market Value

If you want to know how to evaluate a business, one reliable method is to assess the business market value.

Business value is determined by the market itself. With this in mind, you can compare the type of business you want to buy with the same types of businesses that have already sold.

If a business you want to buy is way above the determined market value, then you might be getting ripped off. However, the market value isn't the only factor to consider.

2. Calculate Assets and Liabilities

Another way to get an accurate idea of how much a business is worth is by determining the difference between assets and liabilities. That number will be a reliable indicator of whether or not you should invest.

Remember that assets are a bunch of smaller chunks of a business that can add up to much more value than what might first meet the eye.

Liabilities, on the other hand, are debts that the small businesses still need to pay off, which takes away from value, of course. With that in mind, too many liabilities can be a red flag when thinking about buying a business.

Check out this video if you are looking to buy a website, eCommerce, an app or SaaS Company

3. Check the Income History

Yet another way to assess the value of a small business is by looking at its income history.

This is a great way to figure out whether your investment will be profitable at the get-go. You can also figure out if you're looking at a low-maintenance business or one that will need more work put into it.

By adding up the net profits of the business from the past and getting the average, you can have an idea of what to expect after you buy the business.

From there, you can use a purpose-driven model to grow that business even further if you're up to the task.

You Know How to Value a Small Business

Now that you know how to value a small business that's for sale, you can start thinking about taking your first steps towards finding an actual business to approach.

Whether you want to buy a business that's for sale or put your business on the market through a business broker, BizNexus can help you get matched.

To get started, sign up and set your acquisition preferences, and start getting matched with businesses for sale and business brokers who can help you. Try it at www.biznexus.com

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BUSINESS ACQUISITION

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THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

Embrace Your Entrepreneurial Spirit — Buy or Sell a Business in Boston

Buy or Sell a Business in Boston?

Embrace your entrepreneurial spirit

Entrepreneurship continues to expand in the post-Great Recession world. Businesses are being bought and sold at a rapid pace. And many entrepreneurs are using dedicated digital platforms to make it happen.

Getting Help with Your Goals

Specifically, entrepreneurs are working with organizations that not only have business listings for sale, but also, help them overcome their hesitancy about buying or selling. Although they have a great deal of confidence, some of these owners still have a nagging fear that things may not turn out as desired.

This can certainly be the case when selling a business. While you may want to move onto something else, you also want to get the best price possible for something in which you invested a significant amount of money and time.

The Science of Selling

While searching for a platform that offers business listings for sale in Boston, MA, you want assurances that the organization will maximize the list of potential buyers for your company. Today, much of this is done through advanced algorithms — the same ones that search engines use to produce the results you want. They use a mix of real data such as online reviews and historical transaction performance over the time you were running your business. Algorithms can also assess your unique website or blog hits as well as your interactions with customers.

Once all this data is compiled, it should result in a list of relevant brokers who can help you find the right business to buy or a buyer for the one you want to sell. This relieves a lot of pressure, so you can focus on the next stage of your life.

That’s what we do at BizNexus. Our goal is to connect you with the right people and maximize your potential to find your next profitable business or sell the one you have for a sizable profit. To learn more, visit us at Biznexus.com.

BizNexus -Learn More From Our YouTube Playlist:

PREPARING TO EXIT YOUR COMPANY

Have you checked out our podcast?

THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

Tips on Selling Your Business With a Business Broker

Want to Sell Your Business?

Connect with the RIGHT intermediary and leverage their niche expertise

When the decision to sell a business is final, business sellers often try to do it alone to save themselves the cost of a commission (or because they don’t even know what a “business broker” is, which indicates a larger awareness issue in the industry…).

Today, business acquisition & sale markets are awash with high-tech platforms that claim to make selling a business less labor-intensive and stressful. At BizNexus, we don’t allow sellers to post directly on our platform, and we do that because we believe in the value a great intermediary can provide when it comes to vetting, pricing, and negotiating a unique transaction. If you’re a would-be seller thinking of going along, it’s best to understand the resources available to you to help make a successful transaction actually happen before you jump in on your own.

Data and Reviews

We’re big fans of people, -real people who absolutely should be involved in any company sale process. Use reviews to help you build your deal team. Lawyers, business brokers, CPAs…. It’s 2020 people, -if there’s no data on the interweb about a professional you intend to work with there might be something off, so be sure to check with references and verify, verify, verify before you sign any contract. When a business owner has a business for sale, the process can get sticky leading to a potential transaction close, and we strongly recommend having experienced, capable professionals on-call to help you get your transaction over the goal-line.

Finding the Right Marketplace to advertise a Business for sale

There are certain features to consider when it comes to finding the best marketplaces to advertise a business for sale. These include:

• Do you have clarity on who potential buyers actually are?

• Does the marketplace simply allow you to post a business for sale for a fee? Or is there a professional involved at some point in the process for valuation and listing?

• Is there any degree of confidentiality? Can you anonymize your information, location, etc., and still get in front of the right buyers?

An Online Site Based on People & Professionals

When the decision to sell a business is final, we recommend you try to get matched with the best intermediaries for you based on industry, location, deal size, and real-time transaction data. Check out BizNexus, and get matched up with your perfect business intermediary. We’re a platform for active business sellers and business brokerages active in the industry.

BizNexus - A Solution For Busy Entrepreneurs

If you’re busy running the day-to-day of your business, you might not have time to give the selling process the TLC it deserves. It’s a classic situation of not being able to focus on what’s important because you’re buried with everything urgent. BizNexus is a marketplace created for entrepreneurs, and it only takes a few seconds to get matched up with the best business broker for you, so give it a whirl if you want to get the ball rolling on setting yourself up for a great exit.

BizNexus -Learn More From Our YouTube Playlist:

PREPARING TO EXIT YOUR COMPANY

Have you checked out our podcast?

THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.

How to Make Your Business for Sale More Attractive to Buyers

How to Make Your Business for Sale More Attractive to Buyers?

Here's how to make your business for sale more attractive to buyers.

Now, more than ever, it's vital to ensure your business for sale is an appealing opportunity for potential buyers by considering these strategies.

Are you finally ready to sell your business?

Whether you started a business in recent years to sell it, or you’ve been attached to it for years, you’ll of course want to sell your company for the biggest profit.

To make your brand more attractive to prospective business buyers, there are several ways to make it more appealing. But where to start?

That’s where we come in to help. Here’s how to make your business for sale more attractive to buyers.

Boost Your Brand

If you’re wondering how to sell a business online, one of the best moves you can make is boosting your brand’s online presence.

Think about it – if you were considering buying a business online, what’s one of the first things you’d do?

You’d go straight to google and search it up, of course. And that’s exactly what your prospective buyers will do too.

Thankfully you get to control what they see. And as you can imagine, the better your brand appears online, the better you’ll be able to sell that brand.

However, if your brand’s online presence needs more work, there are several ways to improve.

At a minimum, your company should have an attractive logo, consistent branding, and a polished website.

Visibility is important too. Does your brand rank highly in Google search? If not, this may put buyers off and it’s worth making efforts to improve your search rankings.

Or perhaps your brand does appear in Google search, but in a negative way? If the first links that appear in the search results include scandalous headlines or scam reports surrounding your brand, then this is an issue.

In such cases, you need to make movements to have these removed. After all, a company that’s attractive to buyers is one that possesses integrity.

Buyers will also check up on a brand’s social media accounts, so make sure your company has these. The activity and following of these accounts are just as important too. Buyers are purchasing your customers, after all, so make sure they can see that you have some.

Promote Your Unique Selling Point

When it comes to selling a business, it’s all about promoting the unique features of your company.

What is your business good at? What makes it special? Whatever the answer, maximize it.

Maybe your company sells a niche product? Or perhaps your brand has a huge following? Or a superstar team?

Usually, a buyer will have one main reason why they’re interested in your business. Sure, there may be lots of features they find attractive but in most cases, there’s one standout quality.

Ready to Put Up Your Business For Sale?

Putting up your business for sale is usually a bittersweet experience. But while it's sad to bid farewell to a company you’ve spent so much time and work on, there’s the sweetness too. And that’s the profit you can make from it!

To truly reap the benefits of this sweetness, you’ll want to make your business as attractive as possible to buyers so you can sell it for the greatest profit.

So, remember to know your worth and take the time and effort to improve your brand’s online presence. You should also promote your selling point as much as you can.

We promise it will be worth it.

If you need help retailing your business, we can help you sell for the highest price. Learn how here.

BizNexus -Learn More From Our YouTube Playlist:

PREPARING TO EXIT YOUR COMPANY

Have you checked out our podcast?

THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.