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Make your business an appealing choice for buyers: part 2

Small business owners looking to sell naturally want to do so for a fair price. Last week we discussed various ways a small business owner could make his or her business attractive to potential buyers. This included making sure there was an established mode of business in place, having and implementing accounting software as well as having field service software. Today we are going to discuss two more steps small business owners looking to sell may want to consider.

First of all, it may help to establish profitable pricing methods. This includes having an overhead recovery and profit plan for all products or services your business puts forward. Trying to run a business based on hunches or traditions may not always lead to profits.

Second, keep in mind that for many small business owners, labor is their largest variable expense. For example, some jobs that use more labor (for example, more workers, or a longer work day) do not necessarily use more materials. However, it may mean that the job necessitated the use of more equipment leading to wear and tear that did not do a thing to add to profits. Instead, time estimates for what it costs to perform a service need to be precise, in order to see a profit.

In the end, business sales are part and parcel of not just one's personal finances, but of the economy in general. Small business owners may sell their business in order to add to their retirement nest egg, but if this is to take place, the business must be attractive; it must be something that another person would want to purchase. By working to make your business appealing to potential buyers, you may be able to sell your small business for a fair and appropriate price.

Source: Lawn & Landscape, "6 things you must do to sell your business," Harold Fox, Sept. 27, 2016

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