Business transfer can take many forms, the important thing is to evaluate your company for an agreement that values both the seller and the buyer.
What is business transfer?
The transfer of business corresponds to the transfer by the transferor of a company. It can be the sale of a goodwill, the transfer of shares, right to lease or no door or lease management. Business transfer is a long process that requires great preparation to achieve success for the transferor and the buyer. This is a transaction that totally involves both parties. The transferor must be able to give all the keys necessary for the good functioning of the company and the buyer must take into account all the specificities of this one. This operation is generally done with family and entrepreneurial SMEs.
There are two types of transmission:
- Free transmission
- Transmission for a consideration
For the transfer of business for free, this is the transfer of ownership of the business in the form of donation. This type of donation often takes place in the family circle and it can be a donation-sharing when the transferor wants to transfer his business to several people.
Transmission for a consideration
When transferring business for a fee, it is a question of valuing the transfer price of the company. The buyer is either among the current employees of the company, or among the partner companies or he can be an external buyer.
Valuation of the company and financing
We must determine what makes the value of the company. Indeed, the criteria are often different according to the point of view of where one is placed (transferor or purchaser). The buyer is based on future criteria of profitability while the transferor is based on the past and what he has already built. The value does not correspond to the price, the price is fixed during the negotiation and at the end of the agreement between the two parts. The negotiation will also make it possible to fix the commitments of each one.
In general, the buyer must have at least 30% of the total amount of the transaction as a personal contribution in order to qualify for a professional credit. It is important to contact a professional, especially a broker, before the project, in order to facilitate the process.