An accurate valuation of a non-public company whose shares are not traded on a stock exchange is always a non-trivial matter. Each person interested in the transaction can apply their own methods of evaluation and argue with others, defending the correctness of their own calculations. There is no universal recipe here.

Modern methods of company valuation, it must be admitted, are not far from the classic bookish truths prescribed by Mason and Harrison. Business angels, private investors, venture capital funds and entrepreneurs still use discounted ratios and multiples to value a business. cash flows and net assets. But which method is right for you?

General provisions

The valuation of the company involves a number of assumptions, in particular, the real size of the market (it is especially difficult to "digitize" young, emerging industries), as well as a financial forecast. Often the business plans of an entrepreneur may not coincide with the vision of the investor.

Another subjective indicator is the degree of return required by the investor, covering all his risks. The earlier an investor "enters" the company, the more profitability he requires. At the earliest stage of development, only one company out of ten invested is profitable, notes Konstantin Fokin, president of the National Association of Business Angels. “I work closely with companies, because I want my portfolio to be your average return, I expect that two out of ten portfolio companies can be successful,” says business angel Alexander Borodich about the realities of high-risk investment.

When evaluating the market and companies, entrepreneurs rely on similar transactions that have already passed, which will allow them to get an approximate multiplier and understand the size of the market. The investor makes the final decision on the value, relying not only on the data of similar transactions, but also on his own intuition and the results of “bidding” with the entrepreneur.

At the very early stage of a company's development, the investor pays special attention to the analysis and other indicators of the company: the team, the potential demand for technology, systemic risks associated with the general economic and political background, as well as possible barriers to entry into the market of competitors.

At the idea stage, it is very difficult to give even a rough estimate of the future company - this is an equation with many variables.

But such an answer is unlikely to suit the investor. “Business angels invest in businesses, they do not finance research projects,” states Igor Panteleev, Executive Director National Commonwealth of Business Angels. Most often, private investors refuse startups just because of the lack of sales in a young company.

Discounted cash flow method

Fits: for fast-growing startups in the initial stages of development, with little or no income.

Not applicable: to technical companies.

Basis of assessment: the value of the company is determined from the amount of free cash flow of future periods. The value of the flow is discounted taking into account the risks of future years. The discount rate is determined based on the weighted average cost of capital.

Minuses: overestimation of the real value of the company, inaccurate assumptions (company revenue in future periods, sales growth rates, risks, discount rate).

Method of multipliers and coefficients

Fits: for solid and profitable companies with modest assets.

Basis of assessment: comparison with listed companies with similar operating and financial structure. The valuation is based on several indicators: turnover, EBITDA, EBIT, annual growth. Deals with similar companies that were sold to strategic or financial investors are taken into account. Of great importance in this method is the ratio of the market price of a company's share and its net profit per share. The assessment determines the development potential of the company or the industry as a whole, as a result, the investor or entrepreneur evaluates the strategic value of the company.

Minuses: difficulties in finding a suitable analogue, closeness of similar transactions, complex data collection process.

net asset method

Fits: for large companies with significant underlying assets.

Doesn't fit: for the SME sector.

Basis for evaluation: balance sheet of the company. An important advantage of this method is the ability to qualitatively check the resulting value of the business based on its official accounting documents.

Minuses: Difficult to value intellectual property.

Other Methods for Valuing Companies

Lucius Carey's Rule of Thirds: the company is divided into three parts between the investor, the founder/director and the management.

Competency rule: the assessment of the share of each party is based on the professional skills and competencies of the company's participants.

Greed coefficient: the amount of investment multiplied by the share of the director of the business, divided by the investment of the director himself, multiplied by the share of the investor. If the coefficient obtained is from 5 to 8, the company's valuation is adequate; if it is more than 10, the entrepreneur is greedy and gives investors too little share.

Real experience

Sergey Toporov, Senior Investment Manager at LETA Capital:

We use different valuation methods - from discounted cash flows to the method of comparing projects by metrics and predicting the future value of the company. At our stage of investing, the most applicable, of course, is forecasting the future value with discounting to the current moment.

The most effective evaluation method is the negotiation method. We understand the minimum, comfortable and maximum assessment of the project for us. Then we communicate with the project and correlate this assessment with the expectations of the founders. The figure we settled on is the real cost of the project today.

Margarita Vlasenko, project curator of the IT park in Naberezhnye Chelny:

We use the income method when estimating the cost of IT projects. In Russian realities, the comparative method is extremely difficult to use. It is difficult to find similar businesses and almost impossible to get access to real numbers. The negative side of the cost method is that it does not take into account the cost of intellectual property, the “burning eyes” of the team, and other intangible values. But on initial stage it is on them that the success of the project depends. In practice, the income method provides the most reliable data on a startup. But here, too, you need to understand that none of the approaches gives an objective assessment if we are talking about a start-up business in IT. It is impossible to make long-term forecasts for startups, as sometimes projects undergo major changes in their business processes in the first year of their existence.

Danila Nekrylov, analyst at Bright Capital:

Traditional approaches to company valuation (comparative, cost, income) are practically not used to determine the pre-money valuation of a venture project. It is connected with a high degree uncertainty regarding the future cash flows of the project, often the absence of analogue companies in Russia and in the world. And evaluating the project by its liquidation value often leads to such a figure that it makes no sense for the founder to continue the project in the future.

In venture business, project cost estimation is the result of negotiations between the founder of the company and investors. Often a venture fund evaluates a project based on its previous experience of investing in projects of the same stage of development.

If, for example, in one venture project for $1 million, an investor received 30%, and you can only offer him 10% for exactly the same amount, then the investor will have many questions about how your project is better than its counterpart.

Also, the following scheme is used as a definition of the project estimate range:

• A venture fund determines a “comfortable” share for it in an investment project, usually it lies in the range of 15-45% and depends on the stage of the project and the presence of other investors. Control funds are generally not interested.
• Accordingly, if the investor does not receive a comfortable share in the project for the amount of investment required by the project, this will serve as the beginning of long negotiations. There are two variables in this model - the amount of investment and the pre-investment evaluation of the project by the founders themselves.

In preparing the article, materials from the educational program for professional private investors Ready for Equity were used

Articles

How to evaluate ready business?

A few seditious thoughts

I am sure that professional appraisers will not like this article. Many of them may even want to crucify me upside down on the cross for seditious thoughts about the appraisal business. The fact is that the role of this sphere, its place in the modern economy, especially in small and medium-sized businesses, are often exaggerated, redundant, and practical conclusions are controversial.

What is, by and large, a market valuation of a business? This is a determination of the cost for which it can be sold, and what profit it will bring in the future. Professional valuers have at their disposal several basic methods of valuation, the content of which is widely covered in the literature on valuation and is fixed. valuation legislation

Three methods are used in Russia: "income approach", "cost approach" and "comparative approach". All these methods are complex, require special training, and for an ordinary entrepreneur, whose motto is "act and earn!", They will seem unnecessarily complicated and have a very distant relation to his activities in the form of a pair of outlets, a car service or an online store.

Maybe appraisers are right with their calculations when it comes to large enterprises and transnational corporations?

Alas, not always. Otherwise, the stock market, trading in stocks and other securities would simply die, or would never experience the colossal fluctuations that we periodically observe. Indeed, in the stock markets, especially in countries with developed and rapidly developing economies, colossal money is spinning. Investment funds, management companies, before purchasing shares or bonds of certain companies, actually conduct a thorough assessment of the value of enterprises, rightly expecting a certain level of dividends or capital gains.
If business valuation methods were correct, then the movement of funds in the stock markets would be insignificant, since everyone represented quite accurately how much one could get by investing in a particular company. In fact, the stock market is very volatile and subject to significant fluctuations, sometimes contrary to the obvious logic and methods of calculating business valuation.

Take, for example, the latest stock market crisis. China suffered the greatest losses - since the beginning of this year, the total index of shares of Chinese enterprises has decreased by 20 percent. At the same time, China's GDP growth in 2007 amounted to 11.4 percent, the forecast for 2008 is approximately the same. So where did a fifth of the Chinese potential evaporate in a short time? It turns out that professional appraisers corrected their forecasts so quickly, having made a mistake by trillions of dollars?

What do I care, - an ordinary entrepreneur will say, - to China's GDP, investment funds of valuation methods and other high matters? And he will be right. No one but him can better assess the potential and value of his business. Indeed, in most cases, only the entrepreneur thoroughly knows all the weak and strengths their business, as well as the limit of its development. In order to evaluate the business yourself, it is enough to know a few basic points and follow common sense.

Shortcomings of Individuals

The sale of a ready-made business serves as a kind of moment of truth for an entrepreneur. The point is not even so much in how you developed it, but in the fact that by the time of the sale, due to ignorance of some legal aspects, its value may turn out to be much less than you imagined it. This is especially influenced by the choice of the organizational and legal form of doing business.

Many Russians, when starting their own business, register as individual entrepreneurs. Yes, this form has a lot of advantages: ease of registration, lower penalties, no need to make a seal and open a current account, etc.

But there are also disadvantages, one of which is directly related to the topic of the article - this form of entrepreneurship does not allow you to sell your business in one fell swoop as a complex of ready-made businesses. It is no coincidence that all business valuation methods enshrined in law are sharpened under legal entities. After all, you are acting as an individual, and all contracts, property, permits, licenses, franchises, rights to trademark and so on are made out to you.

The buyer will have to re-register all this for himself, spending a lot of time and money. Naturally, all costs, including payment for speed, affect the final amount of the transaction. And it is not yet a fact that, by renewing the contract with the new entrepreneur, the landlord will provide the new owner with the same conditions as you. He may simply not like the personality of the buyer.

So, if you intend to sell your business, in advance, minimize the number of documents that require re-registration.
Transfer your status as an entrepreneur to the owner of an LLC or joint-stock company appropriate when your business has reached a more or less significant scale. Then you can safely prepare for its sale in whole or in large part.

On the contrary, when purchasing a business, remember about the possible additional costs associated with the peculiarities of its organizational and legal form - individual entrepreneurs are not sold, only their property is subject to sale, and the rights under the concluded agreements are assigned.

One business, three costs!

When you are about to sell your business, you have little interest in the motives of potential buyers at first. However, it is motivation that can have a significant impact on the final price of the transaction, that is, on its market value. A buyer can have three main goals, but they are all related to generating income:

1. Sale of your business in parts or further resale. It is quite possible that you own real estate objects or the right to lease a land plot located in a promising area where active development of residential buildings or shopping malls. Or is it a resale of a regional brand that you have developed, such as Petrov's Krupa, to some large Russian or foreign agro-industrial holding, which is ousting competitors locally.

Approximately according to this scheme, the once famous Armavir Tobacco Factory, which has now become a haven for numerous offices, was bought out and then resold to one of the international tobacco concerns. In this case, the concept of liquidation value is applicable - the price of assets minus the total amount of liabilities and costs of sale.

2. Income from the activities of the enterprise. The buyer is interested in maintaining and developing the business. Perhaps some repurposing, reorganization or affiliation.

In this situation, we are talking about investment value, which takes into account the increase in profits from market expansion, the use of know-how, reorganization plans of the proposed owner. There's a lot of bargaining to be had here, just as Yahoo's shareholders did when they finally turned down Microsoft's super lucrative $44.6 billion offer. The guys from Yahoo apparently felt that in the future their company would cost much more.

3. The combination of the maximum values ​​of the two values, liquidation and investment, results in a reasonable market value. Sell ​​your business on this very favorable price perhaps, as a rule, to professional investors specializing in the acquisition, development and further sale of a business. These can be local businessmen involved in everything that brings money, and representatives of large companies.

Therefore, if you consider your business profitable and promising, feel free to contact large investment companies and diversified holdings of oligarchs with an offer. Surely they do not know about your existence and, if they are interested, they can give a fair price that is beyond the reach of competitors of your level. You can also advertise on specialized bulletin boards or business portals. Today in Russia there is a lot of money, the owners of which are looking for investment objects.

What is the investor thinking?

Any investor, whether investment fund or your neighbor, thinks about how quickly the investment will pay off and begin to generate income. By the way, this is one of the most effective, but at the same time a simple and logical way to assess the value of a business. Professional appraisers would see elements of the "profitable" method in it.

In the late 1990s and early 2000s, an attractive payback period was in the small and medium, and sometimes in big business Russia 1.5-2 years. As the value of the business increased, the payback period increased to 2-3 years. And in large - and up to 5. In the West, the standard is a period of 7-8 years, which is quite reasonable, given the lower cost of credit resources.

The payback period is directly affected by several factors. Firstly, the total cost of the business, its scale - the more expensive the longer you have to wait. But then every month there will be a much greater return.

Secondly, the value of the lending rate - the higher it is, the faster business should generate income. Otherwise, bank deposits will become a more attractive alternative than buying a ready-made business.

The third factor is the rise in prices for real estate, land and, accordingly, the cost of rent. Land and real estate are becoming more expensive, their share in costs is increasing, which leads to an increase in expenses not related to business development, and therefore reduces overall profitability and lengthens the payback period.

The fourth defining moment is the turnover cycle. The shorter it is, the less working capital and funds to start and, therefore, time to recapture the money. It is one thing to sell newspapers and magazines, and another to do construction and repair work. Although the profitability is almost the same.

In practice, the calculation is simple. Let's say your two outlets (standard kiosks) give 120 thousand rubles. net income per month. The kiosks are owned by you, but built on rented municipal land. They are not considered full-fledged real estate objects, they appear as temporary structures, and they will not let you buy the land under them, but they can be withdrawn at any time for city needs. Therefore, as an asset, they do not represent independent value. In this case, a reasonable selling price of your business, given the profitability and short turnover period, may be equal to the amount of profit that you receive in a period of one to two years - from 1.44 million to 2.88 million rubles.

The provisional principle is also followed by many large companies. For example, the Tander company, which owns a chain of stores retail"Magnet" adhered to the following tactics - opening a store in a new place, the company waited 4 months. If the store began to pay for itself, they left it. If not, closed.

By price entrance ticket or write a business plan

Estimating the value of a business depending on the payback period is, of course, convenient and simple, but it misses several important things that could increase its price. First, how much do similar offers cost on the market, and how much time and money would it take for a buyer to create and develop such a business on their own? It is possible that for you personally, thanks to connections in the mayor's office or equipment or premises bought on the occasion, the business cost much less and you developed faster. Selling based only on the payback period would be illogical. Therefore, it is useful to at least roughly estimate the cost of the "entry ticket" from scratch.

Calculate how much you would have spent by the time of the sale at current prices of money on rent, purchase of equipment, advertising, what would be the total amount of costs until the moment of the first profits. In other words, make exemplary business plan, but already taking into account your knowledge of all the nuances. Such an approach is called "costly" by independent appraisers.

A business plan, even the simplest one, will help you convince a potential buyer that your business is worth buying. Try to take into account all your strongest points in this business plan for the client. competitive advantages. For example, your hairdressing salon employs the best craftsmen in the area, for the sake of which people come to you who are ready to overpay for quality. Or that you have the best imported manufacturing equipment in the area bakery products or dumplings.

A good name is worth a lot

Surely you are not the only one who is going to sell a business like yours. It is natural that potential buyer will compare all available proposals, and will most likely need to apply elements of the so-called "comparative" approach. The accuracy of the estimate depends on the quality of the collected data, since, using this approach, it is necessary to collect reliable information on recent sales of comparable properties.
This data includes: economic characteristics, time of sale, location, terms of sale and terms of financing. For example, it is one thing to sell a business for cash, another thing is to sell it on credit.

The effectiveness of the comparative approach is reduced if there were few transactions or a lot of time passed between them; if the market is in an abnormal state, as rapid changes in the market lead to distortion of the indicators. For example, a new head, a well-known lover of the redistribution of property, was appointed (elected) in a district or city. Or, as in Sochi, they decided to hold the Olympic Games.

In order not to suffer much with a comparative assessment of a business, you can resort to analyzing franchise offers similar to your profile, which indicate the requirements for a franchise buyer. The main one is the amount of investment for the business to operate and develop. Simply put, the franchisee is asking you to work with their technology, brand, style, and so on. The franchise can be sold to almost any type of small and medium-sized business: sushi delivery, travel agencies, restaurants, stamp shops and real estate agencies, etc. Type "franchise" or "franchise directory" into an Internet search engine and you will find hundreds of offers indicating the amount needed to start a business.

However, the comparative approach allows you to focus on your individual features, on intangible assets created during the work. Western economists, and now Russian ones, use such a concept as "goodwill" (goodwill - good will).
Goodwill is essentially a combination of those elements of a business or personal qualities that encourage customers to continue using the services. this enterprise or this entrepreneur, and which bring profit in excess of that which is the source of tangible, as well as intangible assets, subject to an accurate assessment in monetary terms.

It is said to occur when you make a profit higher than the average in this area of ​​\u200b\u200bbusiness, that is, people are predisposed to buy from you.

Goodwill includes a favorable location, an established clientele, and the credibility of individual employees. This factor cannot be felt and calculated, but it is necessary to evaluate. Indeed, the development of any business is based on good relations, that is, the good will of sellers and buyers. And your task is to convince the buyer of your business that you have earned goodwill, and it is not in vain that he pays an additional 10-20 percent for a promising and promoted business.

When You Can't Do Without an Appraiser

Having fired a couple of arrows in the direction of the institution of professional appraisers, for the sake of truth it is worth noting that in practice there are moments when you simply cannot do without professional appraisers.

Firstly, in a dispute with the tax office over the market value of the object of sale and purchase in the form of real estate. For example, you bought a room for a workshop for 3 million rubles, and the tax authorities, in accordance with Article 40 of the Tax Code, having the right to control prices to determine the taxable base, they say - you, brother, underestimated the cost of the room and did not pay extra taxes.

This is where the conclusion of a professional appraiser helps in a dispute with the inspection, which will become an argument for setting the transaction price corresponding to the current market value. The opinion of a professional has the status of an official document and can be used in an arbitration court as convincing evidence in cases involving the determination of the completeness and correctness of the calculation and payment of taxes. In addition, sometimes it is beneficial to officially revalue the property of the enterprise downward, which helps to save on property tax.

The second category of partners of an entrepreneur, in relations with which the opinion of appraisers can be useful, are banks. By issuing secured loans, banks try to underestimate the value of the pledged property. Determination of the real market value of the property independent appraiser allows you to establish a fair ratio between the value of the pledged property and the amount of the loan. In case of non-repayment of the loan, the official conclusion contributes to the prevention of disagreements between the parties to the transaction that arise when foreclosing the pledged property.
Professional appraisers are a great help even if you use the services of insurance companies. There are several hidden points that insurers prefer to remain silent about.

A case from one's life. The entrepreneur insured the warehouses he purchased for a fairly decent amount. But when the fire broke out, the insurance company offered a much smaller amount to pay out than was specified in the contract, stating that, based on current legislation, the contract is void in terms of the excess of the sum insured over the actual (market) value of the property. It was of course impossible to determine in hindsight how much the burned warehouse cost. At the same time, the overpaid insurance premium was not returned to the entrepreneur.

If, at the time of concluding the insurance contract, the entrepreneur was armed with the conclusion of the appraiser, there would be no problems - the examination carried out by an independent appraiser categorically does not allow the insurer to subsequently dispute the sum insured under the contract.

There are other times when professional assessment helps entrepreneurs. Among them, it should be noted the assessment of damage in the event of an insured event, as well as damage to the property of the entrepreneur or third parties. Knowing how much you really lost, you will be able to clearly justify your position in a controversial situation, including in a lawsuit.

D. Protasov, business consultant
Magazine " Modern Entrepreneur. Individual approach to business", N 3, March 2008

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Business Cost Factors

If a person is able to evaluate an apartment or a car himself, then when buying a business, you cannot do without a qualified appraiser. And the point is not only that special knowledge will be required here, but also that information about the state of affairs at the enterprise must be correctly extracted and correctly interpreted.
Ready Business Store believes that the main factor in determining the value of an enterprise is its net profit, and not accounting profit, but the money that the owner can withdraw from the enterprise.

1. “First of all, the buyer must pay attention to cash flows and net profit, - says Sergey Kharchenko, head of the valuation department of the Ready Business Store.

If there is no profit even in management reporting, it is worth considering.”

According to the observations of experts, there is a discrepancy between "white" and "managerial" accounting at absolutely all enterprises. Of course, firms tend to operate as legally as possible. But even the smartest ones manage to bring no more than 80% of their business “into the white”.

2. The second most important indicator that affects the value of a business, Sergey Kharchenko considers the period during which the business will bring money.

After all, products may lose their relevance, competitors may appear offering best product, end of lease agreements, or on the territory production premises plan to build a flyover, as in the movie "Garage".

Business in leased areas is cheaper and “recovers” faster, but has more risks associated with the unreliability of the lease.

If the business is done on its own premises and equipment, then it is more expensive, it takes longer to “fight back”. But equipment, and especially real estate, are in themselves liquid asset. They can be sold with profit even in the event of a collapse of the business.

Intangible assets.

Experts disagree in assessing such a phenomenon as goodwill - intangible assets of a company, consisting of a brand, business connections, talent of employees, own know-how, etc.

For small businesses, of course, goodwill is not as significant as in large corporations that spend huge amounts of money on brand promotion.

The share of goodwill in the value of, say, a bakery is small, although there is still some - reputation, culinary skills, recipes.

But there are times when goodwill is a significant part of the value of the business. For example, the value of a firm developing software, fundamentally little depends on the rented space or own computers. In this case, the most important thing is bright minds, the names of developers and managers, as well as their connections.

In other words, the firm may not have large tangible assets, the book value of its property will be small, but it is able to generate significant financial flows. This often applies to information, consulting businesses. Such firms are worth much more than the totality of their assets.

The difference between the selling price of the firm and the price of its tangible assets is precisely the value of this very goodwill. The only catch is that it is extremely difficult to determine goodwill in any other way - except in the circumstances of the sale of the company.

Business staffing.

An important factor formation of goodwill, total cost, and even the viability of the business is the workforce of the enterprise, its qualifications and manageability. The whole business can hang on one person, and this is a huge risk.

A known case in insurance business, when general manager in sales left the company after the change of ownership, and 40% of customers left with him, that is, almost half of the business. It was enough for him to start his own insurance company.

But it's not just about top managers who can switch to another concern and take away the clientele. No less serious problems are fraught with the whims of the chief car mechanic Uncle Vanya with golden hands, on which the entire car service business rests.

It's funny, but the fate of dry cleaning can be decided by a stain remover with a salary of 6 thousand rubles. The profession is very rare, and without such a specialist, dry cleaning loses both its meaning and customers.

Business valuation methods.

Appraisers use sophisticated methods, the essence of which is simplified as follows:

1. Market method - an analysis of similar transactions in the market is made, the necessary discounts-surcharges are made depending on the specific circumstances of the business, and thus the value of the enterprise that you want to buy is determined.

This is the method that everyone uses when buying a house or a car - to start from the prices of a similar product on the market.

2. Recovery method - the business is valued at the amount that would be required to develop a similar business from scratch.

3. Income method - in this case, the income that the enterprise gives or will bring is considered.

Here, the assessment is influenced by the period for which you can "recapture" the funds invested in the purchase. Now normal for a small business is the payback period of the acquired enterprise, equal to one and a half years.

No one will sell a working business for less than a profit of 7-8 months.

It is rare that a business sells for more than two or two and a half annual profits.

According to the manager of the investment banking department of the investment holding "FINAM" Alexander Butov:

first of all, the value of a business is determined by the position of the enterprise in the market and its revenue
followed by profitability and accounts payable
the factor of profitability is important - the forecast of cash receipts for the future and the period for which the acquisition can pay off.

But in practice, - says Alexander Butov, - buyers often use their naive method: the proceeds are multiplied by profitability and by the number of years for which the new owner wants to recoup the deal.

For some reason, three years is considered normal.

The procedure for transferring “ownership of the business”.

The most delicate and difficult question is how to give money and take ownership of a new business. I really want there to be no too great or even insurmountable distance between these two acts.

It must be said that there are indeed risks, including criminal ones. There are risks of non-compliance with agreements, swindle - some intermediary firms even offer physical security services to clients. But, as experience shows recent years, machinations in this area are becoming less crude and more elegant.

The general trend is that everyone tries not to violate the law, especially the criminal one. Which, however, requires even more diligence from intermediary consultants who monitor the purity of the transaction.

Sergey Samsonov, director of the legal department at the Ready Business Store, lists the following as the main risks:

Hidden off-balance sheet liabilities of the company being sold.

With some sale schemes, old debts that the previous owner managed to hide - for example, promissory notes that were not taken into account on the balance sheet, some guarantees, guarantees - may come out after the transaction. And the new owner will not get away from them;

The risk of non-fulfillment of obligations under a business sale and purchase transaction, that is, non-payment of money or non-receipt of rights to a business, with a competent intermediary with a good reputation, in principle, is minimized.

A normal intermediary examines the credit history of the enterprise, collects information from the field of security. He is usually responsible for all documentation related to the appraisal, because he must have an appraiser's license.

In some cases, the intermediary may, by agreement with the parties, undertake financial guarantees upon the fact of the transaction, but this is extremely rare.

Money transfer procedure.

1. First, an agreement of intent is signed between the buyer and the seller, then the buyer hands over to the seller against receipt or makes an advance payment to his account.

2. After that, all the declared circumstances of the business are checked.

3. When the decision is made, the buyer opens a letter of credit in favor of the seller.

4. Then a contract for the sale of a 100% share or shares is signed, depending on the legal form of the enterprise.

5. The bank admits the seller to the funds of the letter of credit only on the basis of a signed and certified sale and purchase agreement and registered in tax office new founding document.

Sometimes, instead of a letter of credit, the buyer rents a deposit box, which is used for payment through the same mechanism: the bank opens the seller's access to the box when the buyer hands over documents certifying his right to own the business.

Transferring money is easy.

Purchase and sale procedure

From a legal point of view, there are four forms of buying and selling a business.

1. The first and main one is the replacement of the founders in an LLC or in a CJSC - as in a legal entity that owns a business. This is a fairly simple way.

Its disadvantage is that the legal entity retains its old credit history under the new owner.

Unknown off-balance sheet liabilities may surface.

There is also a significant plus: the replacement of founders does not require obtaining the entire package of permits, licenses, if the business is licensed.

It is only necessary to register changes in the composition of the founders in the tax office.

Business, as it were, remains untouched, with its pluses and minuses. It's just that the founders and owners are different people.

2. The second way is the creation of a new legal entity and the transfer of assets associated with the purchased business to it.

Assets can be both sold and transferred in another way.

When selling property from one legal entity to another, taxes naturally arise, which, however, can be minimized. The method is also simple, but also has a significant drawback.

The new legal entity must re-obtain the entire set of permits and licenses, if required. And this is a very tricky business.

According to experts, a couple of years ago it took three weeks to receive all the documents for a beauty salon. A year later, it took five weeks. Now it's almost three months. These are the results of the campaign announced just two years ago to combat administrative barriers. Three months ready-made enterprise will be idle, and incur losses for no business reason. Due to bureaucratic harassment.

Knowing the situation, the intermediary-consultants proceed as follows. They create a legal entity ahead of time and receive all the necessary documentation for it. This keeps downtime to a minimum. But in some cases, two permits for one case cannot be obtained, you have to disavow the old one first, and then wait for the new one.

3. The third form proposed by the law is the sale of an enterprise as a property complex. But there are few such cases when an enterprise would be registered as a property complex.

On the contrary, often on one legal entity “hang”, for example, a car wash, two restaurants and a gas station, and only the gas station is sold.

Business purchase and sale transactions under this option are extremely rare. Although experts consider this method to be optimal, it practically removes all the risks described above associated with hidden off-balance sheet obligations or the need to obtain a bunch of new permits.

The three methods described are suitable for the sale of normally functioning enterprises. 4. There is a fourth - for the endangered. This is a sale through liquidation. We are talking, of course, about friendly bankruptcy. Relatively speaking, the buyer and the seller agree, the seller initiates the liquidation procedure of the enterprise, its property is described, sold at auction, where it is acquired by the new owner.

True, there is a risk that another bidder will come and beat the price. But experts say that if everything is done correctly, then the transition of the business to the right buyer is guaranteed. This mechanism is suitable for small business, and for medium, and for large.

Why intermediaries are needed

The most important thing in this area is consultations, evaluation, information, support. No sane investor would buy a business based on their own ingenuity.

The dating factor for Russian business remains very important. And the buyer and the seller often need the recommendations of third parties who are personally familiar with the parties.

A fairly large proportion of transactions go through without it. That is, a normal market situation becomes common, when the seller and the buyer initially do not know anything about each other.

The middleman brings them together, helps with presales, often acts as a business consultant, and helps clean up the business.

He also evaluates the enterprise, makes inquiries about the high contracting parties in the interests of each of them, provides legal support and sometimes even solves security issues.

The services of an intermediary consultant cost 2-15% of the transaction amount - all intermediaries emphasize that their approach is purely individual. And the seller pays for them.

The fact is that sales are made from the set of offers that is formed by the sellers, and therefore the intermediary has to be paid. However, no one prevents the buyer from paying for the services of an intermediary.

Taxes should also be included in the transaction costs. A smart intermediary, of course, will help to minimize them. By itself, the fact of buying and selling a business is not an object of taxation.

Taxes arise if property is transferred during the transaction. Or if the business was sold by purchasing shares or shares and the purchase price exceeded the face value - this difference is considered the income of the seller and is subject to income tax - 13%, if we are talking about individual.

It is clear that in the case of an LLC, a 100% share of an enterprise can be valued at 10,000 rubles at face value. authorized capital but the business can cost $100,000. That is, the difference between the face value and the market price will be $99,700 and should be taxed as the income of the seller.

Often, the parties take legal risks by lowering the formal value of the business, or agree to share the burden of taxes.

Now there are dozens, and even hundreds of proposals for the sale of a business on the market. Not only factories and steamships are being sold, but also small enterprises that can be managed by an ordinary person with at least some business sense.

This market may also be of interest to existing entrepreneurs who want to diversify their business.