How To Sell a Company With a Business Broker In Maryland
A business broker in Maryland should take into consideration the potential buyers in Washington, D.C, and Virginia. Selling a business is a complex process because every company is unique, and every buyer is different. It will require a customized plan that shows the company’s real value to buyers. The following factors need to be considered when selling your company:
Key Factors When Selling a Business
Earnings
Profitability is the item that gets the most attention. It will determine the price someone is willing to pay and its desirability. Additionally, the quality of earnings is important. Earnings that are inconsistent or declining is not desirable and will affect the value of the business.
Asking Price
The asking price is based on a combination of things, but seller discretion earnings (SDE) is normally the biggest influence on the asking price. It is critical that you don’t set the asking price too low, leave money on the table or too high, and get zero interest in your business. We offer free rules of thumb to help you properly price your business.
Due Diligence Readiness
After the price and terms are agreed to, you will enter into a due diligence phase. This is where the buyer inspects every aspect of your business in great detail. They may bring in accounts, specialists, and other professionals to inspect financials, equipment, and operations. Any discrepancies in the business representation could be a deal breaker or lead to further negotiation.
Transferability
Your business needs to be able to run without you. A person of reasonable skill or in your industry should be able to operate the business in your absence using your employees, equipment, and operating procedures. Failure to have a business that can’t operate without you will sell for less and be more difficult to sell.
Bankability
A bankable business is one to which a lender will loan money based on assets, cash flow, and financial history. The more bankable your company is, the more money you can expect. Some businesses don’t have a lot of assets and may be less bankable but still be valuable. It may be necessary for the seller to hold a promissory note to make the deal work.
Record Keeping
Good records are a requirement if you want to get the true value of your business. Tax returns, profit & loss, balance sheets, payroll, and equipment lists are required for at least three years.
Understanding the Market Trends
Selling a business in Washington D.C., Maryland, and the Virginia Market is harder if you don’t understand the market. Business brokers will likely fail if no time is spent analyzing the current market conditions. Methods for selling a company have changed along with technology and the speed at which business transactions happen. The practices that worked in the DMV area just a few years ago have stopped getting the results they once did. We researched market trends and used this data to improve our methods to get businesses sold.
Benefits Of Using a Business Broker in Maryland?
- Maryland Business Brokers Understand The DMV Unique Market
- Knowledge of Business Valuations in the DMV
- Provide Custom Exit Strategy for Your Company
- Everything is Private and Confidential
- Database of Buyers in the DMV
Systematic Approach
A systematic approach is necessary to sell a business in today’s marketplace. Business buyers have access to information about business and industry that makes them more informed than at any time in history. Businesses must be prepared for due diligence and information requests made by knowledgeable buyers. Your company will only sell quickly at the highest price only if it is properly prepared. You can also schedule a call to find out how much your business is worth. Selling a business is not easy and needs to be done properly to get the most money for the sale of your company.
Due Diligence
The key to a successful transaction is preparation. Your company needs to be ready for due diligence long before the first potential buyer looks at your business. Business owners must address any objectionable issues a company may have before their business is presented to buyers. This saves time and maximizes what buyers are willing to pay. Most companies have some negatives that can be eliminated or minimized by planning for the objection. Develop a strategy to eliminate or minimize the issue, so your company sells for more money in less time. Go to our FAQ’s for more information about selling a business. You can also schedule a free phone call to discuss the best strategy to sell your business.
