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2014 could be a banner year for small business sales

An improving economy may have been the impetus for a 41.7 percent rise in the sale of small businesses in 2013. As market conditions and the economy continue to improve, it is speculated that the number of small business sales will increase even more in 2014. For small businesses in New Jersey that survived, and possibly thrived, during the recession, this could be the time for their owners to sell.

It may seem like a good idea to forge headlong into a sale, but due diligence is still required for any sale to be successful. Just because what seems to be a generous offer for the business is made, that does not mean the owner will receive the best price. One of the most important tools for a business owner is a thorough valuation of the business before considering any offer.

Since at least a portion of a business valuation is subjective, obtaining more than one valuation could give a better indication of the true value of the business. A business owner would then receive a reasonable range in which to negotiate a final price. This could help ensure that the owner receives the best price possible for the business.

It can take up to a year for business sales to be completed. During that time, the parties are negotiating and drafting the required legal and business documentation necessary for the sale. Further, depending on the business, the sale may also require approval from and documentation for the state of New Jersey and the federal government. Missing any step along the way could potentially put a successful sale in jeopardy. The appropriate advice and assistance may be required to ensure that everything is in order.

Source: The Huffington Post, Business Sales to Continue Booming Through 2014, Greg Voakes, Feb. 6, 2014

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