"Is selling your home business is actually worth it?"
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Contributing Author: Koko Mouchmouchian
Many mothers have made a successful practice of operating a business through their home in order to add a second income to the family as well as provide constant care and attention to their children.
Women who balance work life and entrepreneurial enterprises have become known as “Mompreneurs”, which in turn has become a growing segment of the American population.
Some mompreneurs, having grown their business into a profitable enterprise, may seek to sell it for a variety of reasons. The question then becomes how to value and market the business to potential buyers.
Tip #1 - Make sure you keep all business records in a safe place.
It is important for any business to keep accounts and records of costs and profits.
Transparency in one’s records allows for interested parties to quickly evaluate how profitable a business is. By keeping a history of transactions the new owner may identify market trends, customer habits, and glean other useful information that may make the purchase of the business all the more appealing.
A lack of transparency can have the opposite effect, as negligent or ill kept records can obfuscate the true value of the business and forces possible buyers into taking on faith the success of the business.
Tip #2- Be sure to regularly determine the value of your home business.
When considering the value of a home business, often the formula used is the assets of the business combined with its earnings potential. The number of assets associated with home businesses are usually minimal, though this may vary based on the type of business being sold.
Thus a majority of the business’s value comes from its earnings and earnings potential.
Businesses that can demonstrate a history of growth, expected income and a strong customer base will have higher value, and as stated above, solid record keeping can be used to demonstrate these factors when determining a sell price.
Intangible assets, such as client lists, a large database, a popular website and so on, may also be used to provide increased value to the business.
Tip #3 - Hire an accountant and a lawyer to review all business records.
Mompreneurs may seek out the services of accountants and lawyers when conducting the sale of their home business. An accountant may be asked to review financial records in order to better assess the value of a home business.
A review of accounting records by a certified accountant is useful in creating trust between a buyer and the mompreneur.
Lawyers can help facilitate the transfer of a business into the hands of a new owner, as contracts and actual paperwork for the transfer may be handled by the lawyer removing many potential time consuming and headache producing activities for the mompreneur.
Tip #4 - Use several marketing strategies to announce the sale of your business.
There are various methods for marketing the sale of a home business.
This may be done through advertising online, in local newspapers, and other print media related to the type of business being sold.
Mompreneurs may also seek the services of a broker, who for a fee, will advertise the sale of the business on one’s behalf and depending on services offered, facilitate the sale by working directly with the mompreneur and potential buyers to complete a transaction.
If a business is successful enough to gain attention of others, there may be interest for purchase among individuals and competitors, and advertising through one’s own website may also produce the desired results.
About the Contributing Author:
Koko
Mouchmouchian is a researcher and writer for MatchCollege, a free college and degree information website, which
assists students and career professionals to locate the school and career that
may be right for them. Read more about business and schools that may offer a business
administration degree
for mompreneurs and entrepreneur alike.
Connect with MatchCollege.com on Facebook and on Twitter
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