[SEL] OT (way OT!) advice on how to sell business needed

[Prepair Ltd]

On Thu, 29 Jul 2004 00:42:43 -0400, you wrote:

>Hi Bill,
>    One thing that you need to plan for is how to get food on the table
>after you no longer have an income from your wife's quilt shop. That, it
>seems to me, is the most important thing that needs to be considered!
>    As to the value of the business, start out with the value of the
>inventory and then multiply it by 0.75. Add to that the replacement cost of
>the building. Be honest here--we all think that what we own is worth more
>that any buyer will! (75% of your estimate, again, is probably right unless
>you get a professional agent to evaluate the structure.)
>    As to the value of the business itself, if it's only "paid it's own way"
>(that is, if there is no profit at the end of the year) it's not worth
>anything. If there has been a profit, I believe the rule of thumb is 10
>times the yearly profit. Perhaps someone in business can comment on this "10
>rule."
>    In any event, good luck with the selling venture. Let us know how it
>goes and how you intend to put food on the table once the business is sold!
>    Dave
>PS, You might want to consider carrying the mortgage yourself on a land
>contract. That way if the buyer defaults you get the business/building back.

Serious and good advice there from Dave. I think that the
considerations of post-business sale should be looming large in your
thoughts, you have to eat and pay the bills as Dave says, so be
careful you don't agree a sale and then spend 6 months waiting for
completion and payment.

What someone will pay for a running business depends very much on how
they see it and what the attractions are to them, so although it may
be the apple of your own eye, try and take a look from the other side
of the sales counter and figure out how it looks from the consumer
side.

We have been working for ourselves for so long now it would be
difficult to go back to a paid job, and at our ages we probably
couldn't find work anyway! :-))


Peter
--
Peter A Forbes
Prepair Ltd, Luton, UK
prepair at easynet.co.uk
http://www.prepair.co.uk