The Potential Value of Your Company When Selling
You have dedicated your talent, skill, and knowledge to the establishment and expansion of your business. Your company has become a great success in your industry. You are now ready to move to the next stage of your life and so want to sell it. If your intention is to sell your company and use the proceeds to finance your retirement or your next venture, then you must work to get the best value for it.
Here is a simple guide to determining the market value of your company:
- Add up the value of your company’s assets
This involves a straightforward tally of everything your company owns, including facilities, vehicles, equipment, and inventory. If your company has shares in other companies, this too should be added. You must then subtract your debts and liabilities from this total. This will give you a good starting point for how much your business is worth.
- Take a look at your revenue
Another way to value your company is to look at how much business you have generated in annual sales. You should then consult with a market expert or stockbroker to figure out how your sales revenue compares with other businesses of your size in the industry.
- Earnings multiples
You can also use the more technical method of price-to-earnings ratio. To do so, you will need to estimate the earnings of the company for the next few years. You can hire accountants and consultants to help you do this in a way that is evidence-based and that will be convincing to prospective buyers.
- Discounted cash-flow analysis
This is a complex formula that takes into account the company’s annual cash flow and projects it into the future. It then discounts the value of the future cash flow to the present time. You should again bring in accounting and financial experts to do this kind of calculation.
- Other means of establishing value
You should also consider the geographic location of your business. This is relevant in some industries. You should also puzzle out the potential strategic value of your company to prospective buyers. If you have pioneered a new technology that no one has been able to replicate or apply as efficiently, this can push up the value of your company.
Engage a Lawyer
Before you sell your company, you will need to hire a business lawyer Las Vegas. Las Vegas business attorneys know how to manage the process of finding a potential buyer and selling your company. Once you have established the value of the company, you want to proceed with finding a buyer. You also want to prepare for the negotiation and transactions that will lead to the sale of your company. A Las Vegas business law attorney can help you with all these matters.
As you enter the process of selling your business, you want to ensure that the agreement works to your advantage. The wording and technical aspects of the sale agreement should be drafted, reviewed, and revised by the business attorney Las Vegas you hired. If you intend to have a role in the company, you want to ensure that your Las Vegas business attorney is involved in working out the agreement. Business law Las Vegas is highly complex. It is important that you follow all the rules and regulations dictated by such laws.
As you prepare to leave the company you have spent so many years building up, it is important to cover all your legal bases. You want to sell your company for a highly competitive price, and you want to ensure that all your transactions are perfectly legal. You should contact business attorney Pintar Albiston.