When any business is measured by any business broker or an owner or some professional appraiser, it is not only the income that is taken into consideration. Assets, economic values used by the business to produce revenue and profits, are weighed heavily to determine the worth of the business. And they must be considered to understand what a business for sale really means to a buyer.
Goodwill is the earnings of business above and beyond the fair market return of its net tangible assets. In other words, whatever the business makes in excess of its identifiable assets is considered “goodwill” income, where there exists a synergy of all of the assets together. This one can be tricky. Most business owners assume they have goodwill in their business, but goodwill is not always positive; there are such things as “negative” goodwill. If the business makes less than the total of its identifiable assets, there exists negative goodwill.
- Secrets in business
The reason the business is in operation may be because of a trade secret, some aspect of a product or service that sets it apart and gives it a market. In a business purchase, these secrets have value and go with the sale.
- Trade names, telephone numbers, websites, and domain names
Some businesses generate business simply because of its name and identifiable aspects. If those were to change, so would the profits. So in buying a business, the buyer will have need those names and numbers to continue in the business. Of course, in some cases, these things would not matter at all, and that is why each one must be approached individually.
- Work in progress
A construction company may have a multi-million dollar job going on at the time of the sale, which can take months to complete. In case such as this, the buyer would have need of continuing in the particular job the company was engaged in; for money and reputation. This is considered a work in progress and has value and therefore is considered an asset and made part of the sale.
- Business records
The history of a business detailed in documents and spreadsheets must necessarily become part of the business sale. The new owner can make use of records in identifying progress, tracking increased or decreased sales, adjusting expenditures and depreciation rates, etc. When someone purchases a business, they are buying the current operation and all the details that led to it.
To gather the bits and pieces
In a situation where there is a business for takeover Indonesia, these are some aspects that we keep in mind before taking that leap. Irrelevant of the risk to takeover an existing business it turns out fruitful because you can skip the trouble of starting a business right from dust!