Around the Web: A Week in Summary
The recent Business Transition Academy (BTA) article “6 Things You Should Do Now to Prepare for the Sale of your Business” offers statistics on the growing number of small business sales over the last year as well as some tips for business owners to help prepare for a sale. BTA suggests to owners:
- Get Your Finances in Order
- Get a Jump on Tax Planning
- Determine Your Personal Goals
- Take Stock of Your Business and Make Improvements
- Diversify Assets and Save Outside the Business
- Determine the Best Business Transfer Option for You
These are all important and necessary steps to take in preparation for a business sale. With so many factors involved in a sale, bringing everything together and having all of the necessary information and paperwork in order can not only help expedite a sale but may also help improve value and buyer interest.
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In a recent article by Charlene Maurer Finerty on RecordOnline.com entitled “Consider the ‘Rule of 72’ for Selling a Business”, the author uses the ‘Rule of 72’ to help demonstrate certain calculations that make it easy to estimate things like investment values and future expenses. This is an important step for sellers to help give them a ballpark estimate of some of the important metrics they may want to track and calculate, and ones that will help them decide whether or not a sale is appropriate at any certain time.
The article also examines other important factors to consider when selling a business, such as the condition of your equipment, tax records, selling multiples, and more.
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The Forbes article “Middle Market M&A: 2016 And Where We Are At Right Now” published recently examines the current state of the Mergers and Acquisitions (M&A) market, how it has changed over the last few years, and a preliminary assessment of the market over the 2016 fiscal year.
According to the article, the M&A market is was down in 2015 as compared to 2014, but picked up some slack in 2016 with a slight increase. These fluctuations are directly related to uncertainty in the overall economy, but there does seem to be growing confidence. Overall per-deal prices were up about 2.1% and businesses in the technology and energy sectors took a large part of the total deal dollars.
With recent estimates finding that up to 75% of middle market companies will be sold within the next 10-15 years, it is important to understand the market to help make the important decisions that may make or break your business in the coming years.
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