S H OW M E T H E M O N E Y Best Business Practices
How To Sell Your Business BY STEVEN C. BURSTEN
Selling a business continues to be a popular hot topic and history can tell us why. Window treatments took off in the 1960s as wholesalers gave free fabric sample books to drapery workrooms and designers. In the ’70s, draperies and, later, mini blinds became all the rage with the introduction of a plumber-type van to carry samples and meet with customers. An aspiring person could launch a low-investment business with no store or inventory. I am proud to have originated the first Shop At Home sample van in December 1973. Now, thousands of owners—some with retail stores, many working from home—are ready to retire and sell their businesses. The guidelines below are based on my experience of selling hundreds of franchises and helping dozens of owners to sell their businesses. If you started your business years ago, or if you’re planning for the years ahead, you want to get a good understanding of the basics when it comes to selling a business: What is my business worth? Who are potential buyers? How can I maximize my return?
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JULY + AUGUST 2022 | wf-vision.com
How Much Is My Business Worth? Don’t waste money on a CPA to value your business. With no inventory, equipment or receivables, it’s not that complex. Your business’ real value is based on two things: business phone and customer list. Here’s what this type of business has sold for in the past: ■ 10% to 25% of current sales ■ 1½ times net profit (profit includes vehicle and nontax business benefits) ■ 10% of future sales the buyer receives for a specific period of time, most likely 12 to 18 months Of course, your business may be worth more depending on the buyer, but this gives you a good idea on how to value your current business.
