Selling your Business??--Consider an Exit Strategy
Posted by: Fernando Simo
on Nov 04, 2009
In one of my recent articles, I discussed profitability (Owners Benefit) as one of the key elements in determining a business valuation. I mentioned that if a business generate limited or no cash flow, it normally can only sell its tangible assets—receivables, inventories, furniture and fixtures and equipment.—for a nominal amount. Yes, you may get more than the book value, but I find it very rare. Unfortunately, over and over again, sellers come to me wanting to sell their business at a point of no return—where the business generates no profit or negative cash flow.
Believe me, I certainly can not be too critical of those sellers—I have been there. I know how hard it is to let go of a dream. However, that is precisely why I feel obligated to write this article. That’s why I recommend an Exit Strategy.