graphic
Small Business
Maximizing market value
July 8, 2000: 7:00 a.m. ET

Tips for getting the most money when selling your small business
graphic
graphic graphic
graphic
NEW YORK (CNNfn) - Thousands of small businesses change hands every year, but often not enough money is left in the hands of the seller.

I asked David Troob, chairman of the Geneva Companies, an Irvine, California-based mergers and acquisitions firm, to share some advice about preparing your business for sale. Here are his tips:

graphicHave an exit plan. "Most entrepreneurs have start-up plans and growth plans," he said. "But too many fail to prepare for the time when they want to sell the business or reduce their day-to-day involvement."

Know the market value of your business. Know the value in the world marketplace. "Simple formulas are often misleading and inaccurate measures of the value of a private business."

Explore ways to increase value. "A business could be made more attractive to prospective buyers if changes are made in the organization, key personnel, or marketing strategies."

Understand when the market is ready. "Be ready when buyers are active, money is plentiful, and interest rates are low."

Don't assume the best buyer is local.

Document the growth potential of your business.

Consider which perks you'll miss after selling your business. "Usually the transaction can be structured to retain those executive perks which you enjoy while meeting the buyer's needs."

In addition to implementing Troob's tips, be sure to work with a competent attorney and accountant. This is not a time to scrimp on professional help.

(Excerpted from 201 Great Ideas for Your Small Business, Copyright 1998 by Jane Applegate. Published by arrangement with Bloomberg Press. Excerpts appear on Saturdays on CNNfn.com.Back to top

  RELATED STORIES

The need for a savvy real-estate broker - Jun. 24, 2000

Rent a financial genius - Jun. 17, 2000

The direct public offering - Jun. 10, 2000

The value of niche banks - Jun. 3, 2000

Picking the right bank - May 27, 2000





graphic

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.