Niche Exit Planning Strategies
Selling a Database Management Software Business
Many business leaders say that now isn't the time to try to sell a database management software business. At Gaebler, we think it's a great time to sell a database management software business. Here's why . . ..
Business sellers sometimes face a long, hard struggle to get fair market value for their companies. But with the adequate preparation, your database management software business can attract buyers who recognize its potential.
Too often database management software business owners fail to receive fair market value for their businesses. That's unfortunate because all it takes to get a fair price in today's market is ample planning and an awareness of what's important to buyers.
Broker vs. No Broker
The decision of whether or not to hire a business broker should never be taken lightly. Business brokers typically charge a 10% "success fee" when they sell a business, but they also handle many of the hassles that are associated with selling a database management software business. You can also expect to receive a higher sales price for your business in a broker-assisted deal.
Finding Prospects
Whether you know it or not, prospective buyers for your database management software business are all around you. In fact, there is a good chance you already know several individuals or companies that might be interested in buying your business for a decent price. We frequently see qualified buyers emerge from the seller's network of business and personal acquaintances. In other cases, sellers take a proactive approach to finding likely buyers and contacting them directly. Competitors may seem like natural prospects and they are. The downside is that they won't pay top dollar and will probably absorb your company into their own.
Business Valuation
Multiple valuation methods exist for a database management software business. 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 database management software 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. Sellers should take note of the fact that all three valuation methods reward businesses that takes steps to increase assets and income.
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