Assessing the Assets of Your Business
If you are thinking about selling your business, it would be greatly beneficial to catalog all of your assets in order to help facilitate a successful sales transaction. One of the first lists an owner should make is his FF&E List (Furniture, Fixtures & Equipment). A business value is calculated in part by its list of assets. The more you can substantiate your asset value, the more it can increase the overall business value. Selling a business differs greatly from selling real estate. Part of the value is intangible and requires a trained expert to realize and quantify it.
Some of the assets that a seller needs to address include:
Equipment: Is the equipment old or new? What condition is it? What’s the replacement value?
Trade name, Trademarks, & Patents: Does your name and product represent value to your customers?
Inventory: How much inventory do your have? What condition is it in? What’s the value?
Customer & Database Contacts: How many contacts do you have? How many are repeat customers?
Key Employees: Will a Key Employee stay on with a new owner? Will any customers be lost by replacing a Key Employee?
The Lease: What are the terms & conditions of the Lease?
Business Records: You might not think of your financials as a hard asset but if you have excellent books & records, you will more likely stay close and validate your asking price. Positive Cash flow is the most common measure of the Good Will component of a Business’s Valuation.
In order to calculate and understand the overall value of a business, you need to look at many different aspects of the business. As a Certified Business Broker, I look at the many variables, including assets, both tangible and intangible, in order to properly value a company.
If you have any questions about selling your business, please contact Certified Business Broker Robert Dean, CBB at Banner Business Sales, Inc. Phone: 310-793-6757. Email: firstname.lastname@example.org