Cash sales, cash plus seller financing and earn-outs are some of the most common. The opportunity to sell a business is frequently unexpected. Because it is a difficult event to predict, planning your exit strategy in advance is an important consideration. Begin by knowing the value of your business and knowing how you plan to cash-out of your investment some day. Taking these steps is the surest way to negotiate from a position of strength and receive the highest price in the shortest time.
Most entrepreneurs start businesses to earn a profit and create value.
Financial statements measure the former, but not the latter. They don't include an estimate of your business' market value - the cornerstone of your exit strategy. Take the initiative yourself and learn to develop a good sense of your business' value. Then update this indicator of performance no less than annually. A Valuation Primer Businesses are valued for many different reasons including liquidation, book, estate, insurance, exchange, and sale.