Smart Exit Planning Strategies for Niche Markets
Selling a Government Contractors Business
You've heard the naysayers - now isn't the time to sell a government contractors business. But what they don't know is that many entrepreneurs see government contractors businesses as a smart business investment.
Waiting for better economic times to sell your company? That's a common anthem in the small business community.
The economy hasn't squashed the market for government contractors businesses. Like always, unprofitable and poorly positioned businesses struggle to find buyers while sellers who have invested time and effort to prepare their sale are being rewarded in the marketplace.
How to Work with Business Brokers
Brokerage is a mainstay of the business-for-sale marketplace. Brokers routinely work with government contractors business owners to achieve desired outcomes and deliver a successful sale as quickly as possible. However, your broker will still expect you to materially participate in the sale of your business. Establish clear lines of communication with your broker and respond quickly to requests from prospective buyers. You should also assist your broker in listing your government contractors business on BizBuySell.com and other online business-for-sale sites.
Laying the Groundwork
Effective government contractors business preparation focuses on communicating value to prospective buyers. Professional business brokers understand buyers and know how to properly communicate a government contractors business to the marketplace. Specifically, brokers can advise you about the preparation of financial statements and other documents buyers expect to see in a premium government contractors business opportunity.
Valuation Methods
The methods for valuing a government contractors business vary according to your business model and circumstances. However, there are generally three valuation methods appraisers use to determine your company's worth. While the income method uses anticipated revenues as a value basis, the asset method focuses on the company's capital, real estate and intellectual assets. Finally, the market method determines the worth of your government contractors business based on the sales of similar businesses in your geographic area. A good appraiser will often use multiple valuation methods to arrive at a reasonable estimate. To drive up your sale price, position your government contractors business by improving variables like assets, revenue and profitability during the years leading up to a sale.
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