Sell a Business for the Best Price
Selling a Property Insurance Business
A good business is about more than dollars and sense. To make your property insurance business what it is today, you've had to fully invest yourself in its success. But the hard work isn't done yet. Before you can make a graceful exit, you will have to invest yourself in your business sale.
The business-for-sale market is just as frustrating for buyers as it is for sellers these days. Although there are plenty of entrepreneurs who want to buy a property insurance business, capital restrictions are holding them back.
If your exit strategy involves selling a property insurance business these days, business sellers may need to apply a combination of incentives and techniques.
Capital is hard to come by these days. Banks and other lending institutions aren't eager to lend to unproven and undercapitalized property insurance business buyers regardless of the business's potential. Rather than abandon their plans entirely, many buyers are pursuing finance concessions from sellers. Although 100% seller financing isn't recommended, sellers are financing up to 70% of the sale price to close deals.
Factoring In Economic Variables
When you sell a property insurance business, there are a number of variables you need to consider. Interest rates, spending, inflation, and other variables directly influence how long your property insurance business will be on the market as well as its sales price. The truth is that perfect market conditions may never materialize. If you don't believe your property insurance business would sell for top dollar right now, what can you do to make it more attractive to the marketplace? Increase profitability? Build brand visibility?. One thing is for sure - buyers are paying more attention to your company's profitability and growth potential than they are to the latest quarterly economic indicators.
You'll need to incorporate the cost of the sale into the calculation the minimum price you are willing to receive for your property insurance business. Good brokerage takes a 10% success fee off the top of the final sale price. Depending on your circumstances, you may also incur substantial expenses in hiring legal, appraisal and accounting professionals. Furthermore, your time has value, so you may need to include a personal compensation consideration in your expense estimates.
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