How to sell a home based business?
If you want to sell a home based business, you first need to understand the value it offers to potential buyers. A Business Evaluation is in order as the first step in learning how to sell a home based business. Let us take a look at all of the steps needed.
1) Client Relationships – Create an outline your clients. Determine which clients are likely to continue to do business with a new owner. Business relationships have value. Put together a “balance sheet” which shows each clients purchases and payment schedule. Determine which clients are (1) likely to continue to do business with a new owner, (2) unlikely to continue to do business with a new owner, (3) may continue to do business with a new owner. Assign a value to each client based on past sales.
2) Vendor Relationships – Create an outline of your vendors. Determine what your relationship is with each vendor. Carefully evaluate any contracts and see if they have transferrable rights. If the person considering purchasing your home based business does not have to negotiate new contracts with vendors they have a higher value. List vendors as (1) needs new contract, (2) will keep existing contract, (3) not accepting new contracts. Assign a value to each vendor based on these contract requirements.
3) Tangible Assets – Depending on what your home based business is you may be able to sell a home based business with a high value on assets. If you use only a computer and printer for your home based business it has less value than one that has extensive hard assets. Evaluate all tangible business assets based on (1) age, (2) depreciated value, (3) cost of replacement. Create a complete evaluation and place a value on all assets.
4) Intangible Assets – Like any business, your home based business has intangible assets. These can be as meaningful as your brand name or as meaningless as the neighbourhood you are doing business in. List your intangible assets and assign a value to them. Make sure you clearly identify how you reached the value assigned to each.
Finding the Right Buyer
One concern about selling a home based business is finding the right buyer. It is important because for some period of time the business even under new ownership will reflect on your good name. While an immediate buyer with cash in hand may be a great catch, make sure you check out their reputation before you agree to sell! You do not want the name you worked so hard to establish falling victim to an unethical person.
Summary
Making a decision to sell your home based business is not easy. However, understanding how to sell a home based business is crucial to moving on.