July 9, 2020  
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Selling a Business


Selling a Used Machine Tool Dealers Business

Few entrepreneurs relish the idea of selling a business in a struggling economy. Yet used machine tool dealers businesses continue to be sold at a brisk pace, outperforming the sales of many other types of businesses.

You won't find any magic formulas for selling a used machine tool dealers business, especially while the market is struggling to overcome the perceptions created by a down economy.
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Undaunted by economic conditions, many used machine tool dealers business sellers are achieving their sale goals through deliberate sale strategies.

Average Preparation Time

There are no effective shortcuts for selling a used machine tool dealers business. Buyers want to see growth trends, healthy profits and other variables that increase the likelihood of long-term success. You'll also need to create financial reports, operations manuals, and other documents to create the perception of a turnkey used machine tool dealers business operation. Since all of this takes time and effort, a used machine tool dealers business can rarely be ready for the marketplace in less than six months. A more likely scenario is that it will take more than a year to create the conditions necessary to receive the maximum sale price.

When the Sale Goes Off-Course

Many used machine tool dealers business are tempted to save brokerage fees by selling their businesses on their own. Although there are exceptions, solo sales typically take longer and are less productive than brokered sales. If you decide to go solo and your business has been on the market for more than six months without a single buyer inquiry, it's time to hire a professional business broker. Lack of buyer enthusiasm or persistence indicates that something is wrong. The remedy is professional brokerage or a consultation with more experienced sellers.

Business Valuation

The methods for valuing a used machine tool dealers 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. In many sales, the most accurate valuation comes from the market method which determines value based on the recent sales of similar businesses. A good appraiser will often use multiple valuation methods to arrive at a reasonable estimate. But regardless of the method that is used, it's always in the seller's best interest to increase revenue and asset values prior to a sale.

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Selling a used machine tool dealers business is a complex topic, so there's still much more that can be discussed. We welcome your questions, comments and feedback about this topic.

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