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Buying and Selling Businesses

Excerpt from my February Business Brokerage Newsletter – Working Capital in a business sale

DEALING WITH WORKING CAPITAL IN A SALE Working capital is the sum of your liquid assets (normally cash, receivables and inventory) and current liabilities (accounts payable). First thing is to review these items and make sure : Only collectable receivables included Only non-obsolete or saleable inventory is included There are no undisclosed contingent or unrecorded…

Pricing your small business for sale (and achieving the asking price on sale)

For small businesses, setting a sale price involves numerous considerations. Owners usually have an intuitive feel for the value, but often the actual sales price is much less than ask. WHY? Usually sellers listing a business ask more than the net asset (book) value of the business. Anything over book value is called goodwill, and…