While there are a thousand things to consider when selling your business, the first and most important question to answer is, “what do I have to sell and what is it worth?” The best way to answer this question is with a business valuation.
4) Pricing your business is part art and part science. If you get more than one valuation, you will get different numbers. If you look at all the different businesses and take an average for mainstreet businesses they sell for 2.1 times the seller’s discretionary cash flow. This varies by industry, of course, and a bunch of other variables. Most Business brokers in bangkok will perform a valuation as part of their listing service for mainstreet businesses.
In this situation there are no dumb questions, there are just questions that you do not know the answers too. The worst mistake you can make is to not ask and assume you know the answer. Your assumption could be absolutely wrong and you need to find that out before the purchase. Ask about the success stats they have on Business brokers online new owners and what caused the failures that have occurred. Major franchises have a very high success ratio with new owners. Lesser franchises may have a very spotty record in this area. You need to know before you buy.
Money is the grease that makes the deal happen. This critical element can be a stumbling block or just another problem to work through. If both parties take the attitude that this problem can be resolved, then normally there will be a way to make this happen. If the seller does not need the full balance in cash from the sale, it is possible that they will take back paper for a period of time. If they cannot or will not finance the sale, then the buyer will need to come up with other sources to get the money that is needed.
You will notice that these little known franchises have low starting purchase prices. If there is one that strikes your fancy, make sure you ask what you get for the money that they want you to pay out. If it amounts to just a business plan, then it may not be worth the expense. This is the reason to ask lots of questions.The questions will ferret out the sweetheart deals and the potential winners.
Steering through the competition: You might have to face a lot of competition when you find the best business at best price because there will be a lot of prospective buyers like you who would be willing to bid for that business. Brokers profile you in such a way that you can win over the competition and get what you want. Without a business broker you wouldn’t even realize when someone moves the business of your choice from under your knows if you even delay your decisions for a little time.
Owning a F&B business has great rewards, but not without sacrifice. If not managed properly, the business can consume every waking moment of an owner. Get your spouse to buy into the deal. If there is not a consensus, don’t buy the business. Two minds are better than one. Respect each others opinion and views. But don’t let the purchase become a burden on the relationship. It isn’t worth it!
Valuation. You will need to have a solid idea about how much is your business worth. Things to consider are your sales and cash flows, your position in your chosen industry, the popularity of your business, your total revenue, and your assets and liabilities.