November 22, 2019  
 
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Selling a Company

 

Selling a Language School

Is the economy still a little shaky for a business sale? Sure it is. Yet language schools continue to sell at a brisk pace, regardless of the economy.

Business sellers are notorious for second-guessing themselves about the right time to put their companies up for sale.
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Although it takes hard work and dedication, if it's time to exit your language school there is a good chance you can sell it for a good price -- even in today's market.

When Is the Right Time to Sell?

When is it the right time to sell your language school? If you're asking the question, now may be the time to put your business on the market. Some experts are telling language school sellers to put their plans on hold until the economy fully rebounds. We aren't nearly as pessimistic about the language school marketplace. With so many sellers holding back, there isn't a lot of inventory out there and you may be able to get a great price for your practice depending on how well you prepare the business and your ability to execute your sale strategy.

Valuation Methods

Professional appraisers can use three methods to determine the value ofa language school: The income method, the asset method and the market method. 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. Using recent language school sales as its foundation, the market method factors market conditions into the valuation process. A good appraiser will often use multiple valuation methods to arrive at a reasonable estimate. Sellers should take note of the fact that all three valuation methods reward businesses that takes steps to increase assets and income.

How Much Does It Cost to Sell a language school?

In a language school sale, pricing is based on a number of factors, including the costs incurred during the sale. Hiring a broker is a mixed bag because although brokers can increase the sale price, they also take a 10% fee. Attorneys, accountants and appraisers work for a flat fee that can range from hundreds to thousands of dollars. Furthermore, your time has value, so you may need to include a personal compensation consideration in your expense estimates.

More Exit Planning Articles

Ready to learn more? You may find these additional resources to be of interest.

Role of Location In Selling a Business

Marketing a Language School

Entrepreneurial Exit Strategies


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Hoping to Open a Language School?

If starting a language school is on your agenda, these guides will help you get started:

How to Start a Language Schools & Instruction Business

Do You Market Products or Services to Language Schools?

If you consider language schools to be sales prospects, there's more applicable information for you elsewhere on our site. Try these useful resources instead:

Selling to Language Schools

Mailing Lists for Language Schools

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