# Selling my company



## mattdaddy777 (Dec 26, 2008)

Hello, I was wondering what is the best way to figure out the value of my company and all its equipment with all its designs inventory and everything. And how should I go about selling it. Any help would be great.


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## wormil (Jan 7, 2008)

The physical assets are simple enough, you should be able to get an idea of the value by comparing with other used equipment. The designs would depend on how much revenue they generate. 

What are your annual sales and profit? (I'm not really asking) A few times I've inquired about a business for sale and the seller doesn't want to give out these numbers. Well you can't sell a business without offering something to sell.

As for the _company_, does your company have a steady revenue stream? If I bought your company today, would I be earning revenue with it tomorrow? Do you have a demonstrable growth curve and projections for future growth? Do you have a measurable share of your market? Have you been recognized in your industry? Do you have employees, how much does your business depend on you? How long are you willing to stay on after the sale to help with the transition? Do you have a customer database? How many are repeat customers? Do you have a reputation in the community? Are your books in order? Do you have debt? All stuff to consider when determining your value.

I've looked at buying a few businesses and it's amazing how many have almost no records. They tell me how much money they're making but when I say, "Show me." it's all hemming and hawing with an excuse that much of the money is under the table. 

How Much is My Business Worth? - BusinessMart.com


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## flirteegirl (Apr 10, 2007)

Also, many companies use a multiple of their net income. For instance, if the business is not seasonal and there is great demand for your product, then you would simply multiply your net income by 7 or 8. If the opposite is true, you would multiply your net income by 3 or 4. Hope that helps.


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## purple72 (Oct 6, 2008)

As far as revealing info, have the potential buyer sign a nondisclosure for protection. One rule of thumb, is if the business can generate enough $ to pay itself off in 3 years. One other piece of advice, let someone else value it. Most sellers let emotions get in the way. Of course, they started or built up the business, so they will think it's worth more. In reality, the books don't lie. The used equipment is based on market, then the balance sheets give the true story. I had someone offer me a company at x $. Problem was, the equipment was only worth 1/3 of that. The rest of the price was blue sky. They had no contracts, and no guarantee of sales, just history. Luckily for me, another buyer walked in and "demanded" to pay full price. So, they got it. Just my 2 cents.


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## sid (Oct 6, 2007)

Probably not the best time to sell. If you can wait out the economy then wait, if not you probably won't get you best price. The above suggestions are good. Bought and sold a number of companies. 
Most small businesses are too dependent on their owners and this decreases their value. Just a thought, as you build your business try to step back from being the "front man" to your customers and let your business "stand on it's own two legs"
Business brokers can get you potential buyers and may help value the business. They are expensive so you figure their commission into the price. They also keep the personal emotions out of the negotiations so you don't blow a deal on a negative comment. 
Books must be pristine. A good buyer will use an accountant and a lawyer. Clean up your shop and office area, No dust or dirt on equipment, no piles of bills, etc. Show you are organized and on top of everything. 
Don't fill your selves with inventory, in this business you can get shirts almost next day and a smart buyer won't let you make a profit on inventory he can easily obtain at a cheaper price. 
The same goes with your equipment. It can be bought new with the latest upgrades.
In this business it is all about your customers and your potential sales. A buyer wants to come in have a "turnkey operation", or add your business to his. Just some thoughts from past experiences.


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## mikelmorgan (Nov 1, 2008)

I have been approached by by local competitors trying to sell their business and I always asked why are they selling. I make a good living doing what I do and if someone is getting out, either they are not good at it or there is health or retirement or something else. I have done business with the people that buy these businesses and find that it is often miss managed. Rick gave some good advice, I can tell you, just like you know I'm sure, that the phone ringing with orders is hard to place a value on. Equipment is easy, trained employees and business growth is a difficult one. Good luck.


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## wormil (Jan 7, 2008)

purple72 said:


> Luckily for me, another buyer walked in and "demanded" to pay full price. So, they got it. Just my 2 cents.


Sounds like it was lucky for the seller another buyer walked in.


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## scottmcb (Jan 6, 2009)

Having bought and sold a business be as truthfull as you can you don't want anything to come back to you after the sale that will end up costing you money or take back of your store also have a detailed P&L [profit and loss] sheet to show your possible buyers.


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## yodude711 (Feb 20, 2010)

Is it allowed to make a post on TF (or TF classifieds) to advertise my screen printing business for sale? Don't want to break any rules here. I read the classifieds rules and it was unclear if this was allowed or not. Any help would be appreciated. Thank you!


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## charles95405 (Feb 1, 2007)

after you have made 15 posts you can place an ad in the classified section of the forum.... so get busy paying.... BTW past in the new member threads don't count I believe.


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## yodude711 (Feb 20, 2010)

charles95405 said:


> after you have made 15 posts you can place an ad in the classified section of the forum.... so get busy paying.... BTW past in the new member threads don't count I believe.


Thanks, Charles. Yes, I saw that rule, I've got 20 posts. Just wanted to make sure it was ok to post a business for sale there before I did so. 

Thank you.


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## binki (Jul 16, 2006)

Get a broker. They have access to many more options than you can ever get. Also, this type of business sells at a premium price of 2.5 times net plus fair market value of FFE. Figure 1.5 to 2 times net plus FFE and you should be close.


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## andreeaa (Aug 20, 2011)

I sold my t-shirt company in 2011 and there are a few ways to value it. I valued mine at 3x profit over the last 12 months of the business. I hope this helps!


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