Are you interested in the topic of buying and selling business and business assets? Are you a professional broker or business owner? Welcome, you will find something interesting here.
Place a Listing of your business assets for sale or purchase or information about your company on BusinessBuySale.com. The Listing will be available to potential buyers in more than 100 countries of the world, in languages with state status, etc.
The Business Buy Sale portal will help you buy or sell a business, commercial real estate, equipment, special machinery and franchise, as well as attract investments in your project
To evaluate the cost of the organization, you have to make a preliminary check. It will help in determining the cost calculation method. As a rule, we at BusinessBuySale perform the following procedures for our clients:
verification of correctness and validity of documentation;
check of licenses and certificates availability;
property inventory;
debt inventory;
description of finished product balances.
We will try to show you possible business valuation methods that will help you choose the option suitable for your specific situation.
To calculate the value of an existing organization for sale, you need to use effective methods of price determination. In this case, all the techniques presented can be combined.
Asset-based valuation is the simplest method. The whole business consists of a combination of assets. We evaluate each asset separately and then add up the value of the assets. Company's property and its depreciation are taken into account. This makes up the price of the ready-made organization. This method is suitable for valuation of simple businesses. It is quite difficult to evaluate intellectual property using this method. In addition, it may be difficult to assess the effectiveness of the use of assets. For example, a business contains many assets and the value of the business is high. However, the profitability of the assets themselves may be extremely low. Therefore, this method is appropriate if you plan to sell the acquired business in parts.
The method of substitution and analysis is as follows: you need to calculate how much it will cost to establish such a business from scratch. Then compare it with the cost of a similar organization. At the same time, the seller must give a discount to make the purchase profitable. This method can be used for capital intensive enterprises.
The price can be calculated by analogy based on the value of enterprises in the same industry. In this way, you can set a benchmark within which you can slightly inflate or understate the price.
Cash flow forecasting is the most specific and complex method of valuation. It is possible to calculate the cost of a ready-made company using this method based on the break-even point, payback period and financial forecasting. Scenario method is also used here. It is necessary to compare the optimistic forecast with the conservative one. As a result, a company will cost at sale as much as it will bring profit in the future, taking into account discounting.
It is not difficult to calculate and estimate the cost of a ready-made business for sale. If the price is calculated correctly, you can effectively sell your company in the shortest possible time. The choice of method of business valuation directly depends on the objectives with which it is conducted.
Business valuation usually depends on many factors - the industry, sector, valuation method and economic environment matter. Consider the fact that if your business is evaluated by two people, you will get two different answers.
The value of your company will also be affected by the state of your financial statements, especially when you want to sell your business.
There are three basic theories of business valuation, which are divided into the following groups.
This approach determines the value of the company based on income. Includes:
Method of income capitalization
Discounted cash flow method
Claim methods (e.g. using EBITDA multiplier)
This approach determines the business value based on the company's assets. Here you can engage a valuator to discuss the value of assets based on the market price in the event of liquidation.
This approach determines the value of the business by comparing it with its analogues in the market. The valuation specialist will focus on the method of comparative transactions. In addition, he or she will evaluate competitive sales of comparable businesses to assess the economic performance of revenue or profit. This works well with publicly traded companies, where income information is open, available, or when valuing real estate, where recent comparable transactions can be easily found.
How profitable is it to sell a business idea?
Market specialists distinguish two types of business idea sales, depending on the degree and level of their initial development. For example...
Sale of business ideas as a concept
This method provides for the sale of an idea at a relatively early stage of its origin, when its author (the owner of the rights to use it) for some reason does not intend to develop an in-depth proposal, but is nevertheless determined to derive a tangible material benefit from it.
To achieve this, you will first have to create a sufficiently detailed description of your business idea, emphasizing its advantages and prospects. In addition to a sufficiently comprehensive description of the essence of the issue and the basic principles of the future business process, this document should contain a serious analysis of all the positive aspects of the project and possible risks in its implementation.
After drawing up a detailed description of the project, you can take the creation of a vivid presentation of a business idea, in which you can try to focus the attention of the future serious audience (experts, investors, etc.) on its exceptional (exclusive) properties and opportunities that its implementation opens at the initial stages of its implementation.
At the same time, it is worth emphasizing the main points related to the possibility of rapid business expansion and options for reducing start-up costs (without prejudice to the start-up and development of the enterprise).
Sale of business idea as a ready product
This type of sale of business ideas can bring you much more income, although beforehand you will have to work hard enough on the implementation of the business idea, at least in general terms. However, with a competent approach to business, all initial investments will more than pay off.
Prepare a few samples of your future products (if you intend to organize a production business) or a detailed description of the complex of services, preferably with the possibility of public demonstration, if the company belongs to the service industry.
Carefully calculate the cost of each unit of production (position in the list of services offered), with a detailed description of the full range of benefits that distinguish you from all that already exists on the market.
Even before you start searching for buyers, try to protect the fruits of your labor with a patent or a trademark.
