Business Sales

To sell a company, the owner must know how much it is worth. The first step to a sale, for both the buyer and the seller, is to get an appraisal.

How to Sell a Company

A qualified, licensed agent will evaluate the worth of the business based on several factors. The five most common are historical earnings, current earnings before taxes and interest, projected future earnings, assets, and the owner-operator's salary.

The valuation is not the final word on the price, however. Other factors can determine how much the business will ultimately go for, and negotiations will inevitably ensue. The valuation is simply used to determine the starting point for those negotiations.

Listing the company is another important step. There are several places to advertise the sale. One is in local papers or trades. The Internet is another place where people will look for a company. These two options have the benefit of being less costly, but they are very public. Sometimes, publicly announcing a sale can be detrimental to the company. If that is the case, listing the business on a multiple listing service, such as the International Business Brokers Association (IBBA) database, is a better option. This can only be done by a broker, though, so those working alone will not have this option.

The most important thing to remember is that selling a business takes time. Making a quick sale is unlikely and probably unwise. Keep this in mind when making plans.

RPI Commercial is a brokerage company that provides a full complement of services to help people buy, sell or start their own businesses. Call 1-877-549-5210 or send an email to info@rpicommercial.com for more information.