Overview A lot of small business owners start planning their exit with questions about business...
When a buyer is interested in your small business, they will want to engage in a thorough examination often referred to as the due diligence process. Whether you plan to find a buyer for your small business or plan to sell to a business partner, employee or a family member, the due diligence process is a crucial step. If you need a refresher on just what due diligence means, just click here.
If your business structure is a corporation, then you filed for Articles of Incorporation through the Secretary of State’s office when you started the business.
When selling a business, the purchase price is determined by the separate values of the various assets and liabilities acquired from the transaction. What does this mean? In a nutshell, this means that when you negotiate a sale price for a business, you and the buyer must agree as to what portion of the purchase price applies to each individual asset, and to intangible assets such as goodwill.
The tax returns serve as a legal, objective verification of the amounts that you claim your business has earned. A potential buyer will want to see federal income tax forms that document your company’s gross sales as well as its net profit or loss.
Every business owner wants to know “how much is my business worth?” Let’s be honest, you built your business and it is probably a big part of your financial net worth and maybe selling it is key to your retirement planning.
Digitalization is rapidly taking over society and an online presence is a must for any business. As a small business owner, you are always looking for ways to reach more customers and grow your revenue.
Ideally, as an owner, you want to ensure your business is not undervalued when the time comes to exit the business while a buyer doesn’t want to pay an inflated price. To achieve this, comparables are an excellent way to estimate the fair market value of your business.
If you feel as if your life and business are intertwined, that’s probably because they are.
As a result, it might be difficult to distinguish between the two. Failing to establish clear boundaries between your business and personal lives can have a substantial influence on both.
Data also suggests that many businesses close due to personal reasons such as illness/injury, age, or selling the business.