When you’re looking into selling your small business, it’s imperative that you understand the process so that you get the most out of the sale. The sale of businesses of any size begins with a business valuation. Business valuations are important for determining the company’s worth in terms of assets, market competition and income values. A business valuation will give you the insight you need to make an informed decision of how much to sell your business for.
Valuating Your Small Business for Sale
In order to prepare for your business valuation, you’ll need to assemble the relevant information and documents.
Gathering Business Valuation Documents
Ideally you should have the previous 3 years documents available. These key business documents include:
- Your business history documents, from the start date; include location changes, changes in ownership, business name certificates, licenses, permits, and other compliance documents.
- Employees’ details, performance reviews, and payroll.
- Full details and values of physical assets including buildings, equipment and office furniture, etc.
- Detailed intellectual property the business owns including patents and trademarks; anything that is protected legally by copyright.
- Your leases that include utilities, contribution to marketing fund, cost of parking and number of parking bays available, as well as compulsory trading hours.
- Insurance policies.
- Financial statements that reflect the turnover and cost of sales figure within the business, and if available projected figures and growth opportunities
- All business expenses such as bank charges, transport cost, packaging, etc should be detailed. Make sure you indicate any personal expenses and owner drawings which also makes out part of the business profit.
- Supplier agreements along with pricelists and monthly expenditure for each.
If you are looking to do an evaluation for your own business, you have the option of doing it once off. You can then use this insight yourself, or get a professional to list your business on a registered site, and do the legwork of selling your business for you.
Alternatively, if you’re a franchisor, accountant, or business broker, you have the option of using an online valuation tool to value multiple businesses accurately, in the quickest, easiest way.
With businessforsale.co.za, valuating and selling your small business can be done efficiently and effectively, whilst ensuring the best possible price. If you’re looking for a small business for sale in Gauteng and surrounding areas, or you’re looking to sell your business, get in touch with our experts!