Signs continue to improve for the M&A market and 2014 looks to build on the progress made last year. A steadily improving economic climate and still record-low interest rates are combining to form an ideal environment for transactions.
According to a BizBuySell report, the number of small business deals that closed in the third quarter of 2013 was up nearly 42 percent from that same period a year earlier. Meanwhile, the median sale price for small businesses was up nearly three percent during that time.
A recent CNBC article highlighted five ways that business owners can get the most for their transaction. We agree.
1. Get your books in order.
Many business owners don’t keep their books as well as they should when considering a sale. Don’t procrastinate when it comes to setting up your financial records for a sale.
2. Protect your intellectual property.
Many businesses wait to trademark their business or copyright intellectual property until they are in talks with buyers. This can be a bad time to discover potential issues.
3. Make sure the business isn’t dependent on you.
If the business can function without the owner’s involvement, it will almost always fetch a higher purchase price.
4. Know what your business is worth.
A business valuation will help you know where your business stands, and what improvements can be made to increase value.
5. Don’t keep secrets.
Make potential buyers aware of any issues up front. Waiting to reveal these details will only hurt you in the transaction process.
To read the full CNBC article, please click here.