Determining Who Might Buy Your Business

First, determine what type of small business you are. If your net profits are below $1 million and your gross revenues are below $3 million, you may be a "mom and pop." This somewhat disparaging term used to refer to companies with revenues under $1 million, but times change and inflation has pushed the net profits to where the revenue numbers were 15 years ago. At this level, you will be looking for people who want to run the business as you have, people who are basically buying themselves a job. Given the instability in the financial markets, more and more people are looking to buy a business as a way to insulate themselves from the financial markets and create long-term value. Most companies in this market size are currently selling for 1.5 times to 3 times their EBITDA (earnings before interest, taxes, depreciation, and amortization). However, this does depend on your market niche.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.