People decide to sell their business at some point in their life. The reasons may be different, but the proceedings followed by many are the same. Unfortunately, most of them do not plan for an exit from the business beforehand. That’s the very reason they will not be prepared for it, and they may not make the most of their business sales.

Whether you’re well-prepared or not, you may want to seek professional help, so that the sale proceedings can turn out to be a profitable one. According to John Binkley, based in Dallas, the leading expert in merger and acquisition proceedings, clients need experts’ help not to meddle with their decisions, but to help them in closing off their deals in the most profitable manner. These professionals will guide the sellers to find out the attractive and prospective features out of the deals.

Mergers and acquisitions negotiation

Regardless of your decision whether you’re going to hire a business broker or an M&A specialist, you need to understand the basics.

Intangible assets = unique business features

The complexity is that two similar companies in the same industry are valued differently. There’s a chance that a buyer has to pay a premium for Company A and not for company B. But why are such differences exist?

The answer lies in intangible assets.

These intangible assets refer to ‘off balance sheet’ assets. Business owners have to find out the intangible assets of their companies and capitalize on them, as they affect the overall business value.

Some typical intangible assets for a business entity:

  • Branding: Established brand of a company, which is recognized by all;
  • Backlog: the expected revenue streams of the company based of booked orders;
  • Bookkeeping: Accounting systems followed in a regular manner and annually reviewed by CPA?
  • Computer software: any customized software used or developed;
  • Contracts: all the short term contracts with the existing clients;
  • Customer list: blue chip customer list for the buyer;
  • Customer relationships: Loyal and regular clients with long term relationship;
  • Employee manuals: Any training material developed for the new employees;
  • Established staff: a strong base of long term staff;
  • Governmental programs: Participation of governmental programs at a local or national level;
  • ISO standard: any acquired ISO standards.

Of course, the list can go on and on. But what’s important is that you need to prepare a list. After the list is created, the features must be highlighted to the buyers who will be attracted by their specific value.

The problem with the intangible assets is that it’s tough to assess them. However, according to the professionals, it’s important to know the exact value of the business so that the seller can make a profitable deal with the buyer.

Business for sale negotiation

Takeaway: Think like a buyer

To understand the value of your business, you need to think like a buyer who tries to acquire the sellers’ business. This is very important because, unless the seller does all these homework and is aware of all the important points of his business, he/she can’t sell the business to a prospective buyer at the best price.

Knowing the ins and outs of the intangible assets’ value, as well as any other factors that influence the value of a business, is the major aspect that leads the seller to profitable deal. All this is a real art, as well a science. If you don’t have the ‘knack’ to close the transaction, hiring a professional is the best way to go.