How would you sell a business/startup?
I plan on selling a business that I recently started. It's been slow, but profitable, but how would you sell it at its peak? Or sell it at all? Should I sell it?
- Andrew StraussLv 78 years agoFavorite Answer
Many owners have no idea. On one end of the spectrum, for example, was a client who owned a professional services firm. She felt the firm was worth more than $1 million. After a lengthy search, a buyer paid her less than half that amount. Then there was a client who was about to sell his I.T. company to an employee for $200,000. After advertising the business for sale nationwide, he sold it for one dollar shy of $1 million.
Selling a business is both art and science, and in no other area is this more evident than the valuation. While every seller wants to achieve maximum value, setting an asking price that is too high signals to buyers that you may not be serious about selling.
While there are a number of methods used to value a business, the most common formula for smaller transactions is a multiple of seller’s discretionary earnings (S.D.E.). This type of market-based valuation involves recasting profit-and-loss statements — adding back owner’s salary, perks and nonrecurring expenses — to find the S.D.E. of the business and then using comparable data for similar businesses to arrive at an appropriate multiple.
- RobLv 78 years ago
Sorry u don't sell a 'start up' as it has no value.
define profitable. if it has less than five years
operation , it has little real value expect for
salvage of equipment.Source(s): business owner , 6th reincarnation.