Pricing and Positioning the Business for Sale
Apr 30,2014
Sell-side due diligence, or valuing the company’s assets and examining and documenting the health of the organization, is a fundamental component of the sale process. This procedure, even for small businesses, will help drive a selling price that satisfies ownership while reassuring a buyer of sufficient return on investment.ESTIMATE VALUEThere are many methods for valuing an organization, although the eventual selling price is always based on the value perceived by the buyer. Two common methods are:Asset valuationThis approach is common when a manufacturer is being sold for liquidation, as the assessment identifies the potential selling prices for used equipment, facilities, inventory and real estate. This approach also applies to businesses being transferred to new owners for operation, in which case intangible assets can greatly impact overall corporate value. For example, a manufacturer with few physical assets might hold intellectual property that hasn’t yet been commercialized, or it may have long-standing...

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