New York, NY -- (SBWIRE) -- 12/24/2012 -- If you are selling a business, you need to follow a specific strategy so you can avoid selling your business at a less than optimal price. Using the right strategy also allows you to increase the speed of selling your business. Indeed, acting strategically during the sales process helps ensure you are even able to sell at all. Keep the following factors in mind when formulating a sales strategy for your business. They can help you position your business. These considerations can also influence your negotiating posture and maybe even adjust the price of your business to ensure its sale.
Factor #1: Your industry helps determine your sales price
No business exists in a vacuum. Your business' continued potential relies on how well the industry your business in is doing. Is the industry growing? Or has it reached its peak and it's all downhill from here? These questions help determine the multiplier the buyer will apply to your net profits in order to arrive at an offer price.
Factor #2: Your cash flow impacts your valuation
Is your business local or regional? How big is its geographic market? Is it growing? These questions help determine what multiplier the buyer will use on your net profits.
Factor #3 Competition level impacts your businesses' attractiveness
Just as you wouldn't want to bring only a knife to a gunfight, a smart buyer will be very careful not to blunder into a highly competitive market with shrinking margins. This factor impacts how interested the buyer will be in acquiring your business.
Factor #4 your industry impacts your attractiveness
Some buyers want to enter certain industries. Your industry impacts how attractive your business looks to a potential buyer.
Factor #5 the asking price will determine how quickly can your business sell.
Your income after costs determines the base price for your business. It is multiplied against the applicable multipliers for your business.
Factor #6 Identifiable risks impact your base price
Buyers factor in the amount of risk they will face if they buy your business. They price these risk factors in to the base price. Some common risk factors are: government regulation issues, lawsuits or legal exposure, pace of technological change in your industry, changing end user tastes, and other risks.
Factor #7 Goodwill impacts your base price
If your business has been around for quite some time, goodwill and brand equity are factored into the base price of your business.
Factor #8 Have a realistic selling price of your business; a non-profitable business will not sell.
About The VMD Group:
The VMD Group, LLC is a professional full-service, business brokerage firm specializing in the sale and purchase of privately held New York companies. We also provide business loans and equipment financing from our network of lenders to assist and expedite the process. We confidentially market small businesses, priced from $250,000, to large companies with a value of $20,000,000, successfully brokering sales to qualified buyers.
Our sole focus is buying and selling businesses, that's all we do. As experts in the field, we know that it requires much more than just putting together a buyer and seller in order to result in a successful sale. It's a complex process involving attorneys, advisers, accountants, and lenders in a maze of regulations, paperwork, and negotiations, that are daunting without professional representation.