Exit Planning Tips
Selling a Herbalists Business
Is the economy still a little shaky for a business sale? Sure it is. Yet herbalists businesses haven't heard the news and are reporting steady action on the business-for-sale market.
You're optimistic about the economy and so are we. Now the challenge is to convert business buyers who may have a more skeptical outlook.
Qualified buyers are constantly looking for attractive herbalists businesses. Like always, unprofitable and poorly positioned businesses struggle to find buyers while sellers who have invested time and effort to prepare their sale are being rewarded in the marketplace.
Sale Preparation Timeframes
There are no effective shortcuts for selling a herbalists business. Since buyers prefer to see evidence of future cash flow, you'll want to to strategically lock in cash flows and increase profits before you list the business. Next, the business will need to be documented in professional financial statements and manuals that facilitate the ownership transition. At a minimum, plan on spending six months preparing your herbalists business for the marketplace. However, to command the highest price, you'll probably need to spend one to two years preparing and positioning your business for buyers.
Legal Considerations
It pays to invest in first-rate legal counsel when you sell a herbalists business. A good lawyer serves a variety of functions during the process. In addition to reviewing the letter of intent, sales contract, and other documents, your attorney should be capable of advising you about due diligence and the tax consequences of the sale. It's helpful to introduce your attorney to your broker to facilitate a smooth sale and a productive working relationship.
Valuation Methods
Professional appraisers can use three methods to determine the value ofa herbalists business: The income method, the asset method and the market method. While the income method uses anticipated revenues as a value basis, the asset method focuses on the company's capital, real estate and intellectual assets. In many sales, the most accurate valuation comes from the market method which determines value based on the recent sales of similar businesses. As a safeguard, consider conducting appraisals using variations of multiple appraisal methods. To drive up your sale price, position your herbalists business by improving variables like assets, revenue and profitability during the years leading up to a sale.
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