Optimizing the Sale of Your Business

Selling Your Business?

Selling a business is now and always has been about a willing buyer and a willing seller. The gray area is about price and structure.

As we look forward to 2013, I believe it may be some time before we see long term capital gains at the 15% level again. Its not a forgone conclusion that capital gains taxes are going to be higher in 2013, but it more likely than not.

That gives us about 300 days to determine if we are ready to sell our company.

The IRS and most financial institutions require a valuation of a business to be historically based and ROI centered. Most business transactions in the U.S. are consummated by public accounting firms like ours. Most transactions result in a 3-4 X multiple of EBITDA (Earnings before income taxes depreciation and amortization) adjusted for excessive owner distribution expenses.

I believe the value of your company, for purposes of selling the business, should be based upon what it can do and what it will do in the future. That may require a better approach, or it may require us to re-evaluate what is meant by a “willing buyer”. What the buyer is willing to pay for your business and what the company is worth to Them is a more palatable approach when attempting to maximize value.

Let us create a Sales Plan for offering your business to strategic buyers and structure the deal for the optimum solution.

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