Hanaads

When marketing a business for sale you will want to get the best result possible. So when is the best time to sell so as to achieve the best realisation of the value of a business?

When Should You Sell?

You are likely to get the best price for your business at the point when its growth prospects appear highest. The growth prospects of your business will appear best when:

- your company’s business is growing (has been growing strongly and has prospects of strong future growth);

- your industry is growing; and

- the outside economy is growing.

Ideally therefore, you want to be selling at a time when your performance is good and your prospects are better.

It is a fact of life that many entrepreneurs are attracted to high growth industry as an expanding market offers easier opportunities to create a new business. What you must bear in mind however is that every high growth industry eventually settles down to a much lower rate of growth which cannot support new entrants into the market and often cannot support all of the existing players. Therefore many sectors, from skateboard shops through to nursing homes, golf clubs, and mobile phone shops, will show periods of high growth with large numbers of players entering the field only to have a ‘shakeout’ as the rate of growth declines and the less successful players go to the wall.

In buying your business, purchasers will be putting a value on the prospects of the business.

When picking your moment to sell therefore, it pays to ‘leave something in it for the next man’. Remember that selling a business is a process that will take some time. Many entrepreneurs are tempted to hang on into a growth industry, attempting to squeeze every drop of growth out of the business and aiming to sell right at the top of the curve.

The danger with this approach is that you just might be very lucky and sell out at exactly the right time. However, bear in the mind that the sales process will take several months to complete, from start to finish. The chances are that you will not be successful and will miss selling right at the peak.

The point to note here is that the value of the business sold when it is on the up in a high growth phase is likely to be much greater, or as great as the value of the business sold at the peak as growth starts to tail off, because the business during the growth phase will be being valued on the basis of continuing growth as perceived in the marketplace; whereas the value of the business as the market flattens out may be valued on greater absolute earnings, but potentially at a much lower multiple due to lower growth prospects.

Moreover, if you wait too long in the business’ lifecycle and the market starts to decline, the value of the business will be based on a deteriorating growth prospects which will be reflected in the multiples achievable.

You should review your business every six months or so and consider whether now is a good time to sell. In fact, asking yourself the question: ‘Would people want to buy my company?’ is a good test of whether you are generating value or not. Because if the answer is ‘No’, what does this tell you about your business?

Keep an eye, therefore, on the value of your business and the rate of growth of it, its industry and economy in general.

So What If You Need To Sell But Your Business Is In Difficulty?

If your business is in difficulty, if you attempt to sell it you will have to accept that you are unlikely to get as much for it as you would if it was in good health; since as a distressed seller or someone selling a distressed business, the value you are likely to achieve for your business will be low.

Therefore, if your business is in difficulties, in order to improve the price you are likely to achieve, it is usually best to attempt to turn it around first so as to be able to market a business with a better current trading performance and future prospects (a process sometimes referred to within the turnaround profession as ‘polishing the pig’).

If your business has become quite severely distressed, and in practice would fail one of the tests for insolvency set out in the Insolvency Act 1986, in that it is unable to pay its debts as they fall due or that its liabilities exceed its assets, then there are further problems in attempting to achieve a sale.

These are, that in the event of a liquidation, the insolvency practitioner who has been appointed will have a duty to look at transactions during the period leading up to the insolvency, particularly those undertaken when the company was technically insolvent, to see whether any of these should be reversed.

In particular he will be looking for transactions at undervalue where he is able to argue that an asset has been sold off cheaply (such as you have sold the Rolls Royce to Joe, your brother, for £5 the day before the liquidation), or preferences, where he is able to argue that you have acted to put one creditor in a better position than others (such as you have paid Joe, or have transferred assets to him in settlement of his account prior to the liquidation, when you have not paid other creditors).

Thus, any sale or transfer of a business’s assets in the period leading up to a liquidation may be subject to a challenge in the courts by a liquidator. They may also feature in the liquidator’s report on the directors’ conduct prepared for the Government’s directors disqualification unit on which they may decide to bring proceedings.

So in summary, when you want to sell your business, choose your moment to sell, do not have it forced upon you. Be proactive about deciding when you want to sell your business and never allow yourself to become a forced seller of your business as a result of economic or other reasons. If you do, you will achieve a worse price because firstly, you will not be selling at the most opportune moment to maximise value, and secondly, because anxiety will force you to accept lower offers than you would otherwise consider.

Self storage units are a great way to store your important business documents in an environment that is low-cost and secure. The most common reason that businesses use self storage units is to store archived documents and records instead of using up valuable commercial space.
There’s no getting away from the fact that when you’re in business you have a legal requirement to store documents for several years. The majority of those documents are not needed on a daily, weekly or monthly basis and most will never be accessed again – they just need to be kept safe and sound. So it makes good common sense and business sense to store them away from your normal working day premises. Here are 5 benefits for your business of using self storage units to store your important documents:
1. State of the art security – Self storage units offer the highest level of security for your archived records and documents. You might not need the documents now, but you would be devastated if they were stolen or destroyed. Making use of a self storage unit means your records are in a secure locked unit which is monitored and not able to be accessed by anyone without your permission. You can store your documents and basically forget about them, because you know that the self storage unit is perfectly secure.
2. Clean and climate controlled – It’s not easy keeping paper documents in a good condition when you store them in a roof cavity or a back cupboard. You never know what could be happening to them, from rodent attack to damp or heat damage. Self storage units are well-maintained, clean and have just the right climate controls for archived documents. There’s no chance your precious records will get wet or hot, so when you need them, they’ll be in just the same condition as the day you left them there.
3. Convenience and service – You never know when you will need one of your important documents. You might think they’ll never be needed, but then along comes a day when you’re asked for something in particular. Storing your business documents in a self storage unit with purpose-built racks and filing systems means they’re available when you need them at a site that is convenient. You can access your property whenever you need to and find the right document easily.
4. Value for money – It makes good business sense to use your office space well. Storing documents is not a good use of office space, so keeping archived records in a self storage unit makes financial sense. Self storage units are great value for money. You can rent exactly the size you need and you’ll be surprised at how inexpensive it is.
5. Welcoming friendly staff – Keeping your important documents in a separate location is a big decision, so you need to know that the staff who monitor the premises where they are kept are doing a great job. When you need a document quickly, a friendly staff member can make all the difference in keeping your business ticking over smoothly.

If you are looking for houses for sale, search the Property Live directory of the best estate agents in the UK and be sure that you are dealing with a professional.

ATP Instrumentation are experts in finding you the thermometer you need for your application. Find out more.

Canvas Print Finding that final touch to set off a feature wall or give your room a more homely feel can prove to be something of an arduous task. While there are many companies offering a variety of canvas prints, finding the one that captures the look you want, in the size you want, can ultimately prove to be a fruitless search.

newsletter templates Get some of the best newsletter templates ready to cut, paste & publish. Increase your revenue and keep more of your clients by staying top of mind with newsletter templates that allow you to communicate your message in minutes.

gold coins Different types of US Mint Gold Coins including pre 1933 gold, American Eagle gold buillion, St. Gaudens, Liberty $20, and more.

Government Jobs India latest Government Jobs India openings, Bank Recruitment India, Govt Jobs. India, Railway Recruitment India and Sarkari Naukri.

Photo Books|business telephone systems|iPhone 3gs Cases|business cards|Indian Consumer Complaint|Indian Consumer Complaints|foreign exchange money rates|foreign currency exchange