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Bob Hughes Answers: What Is The Goodwill Of Your Business?

Bob Hughes On Goodwill Selling A BusinessGoodwill is what a business owner has built into his business over the years that include:  Reputation, Telephone number, Logos or trademarks, Customer lists, Vender list, Branding, Lease value, Web page, Marketing materials, or any other intangible item that goes into the sale of the business.

Goodwill is the value placed on the continued relationship between a business and its' customers and venders.  Business flow and volume are based on the continued spirit of the business reputation in the community.  Buyers want to purchase the goodwill instead of starting from scratch.  It takes a lot of money to build a business over time.  The advertising, marketing, branding, and the experience of the customer base creates the goodwill.

Goodwill is not fluff that many buyers would like to believe, the tangible stuff is easy to buy but the goodwill is the real value of the business. Cash flow is generated not by the inventory, equipment and fixtures, it is the goodwill that makes the difference between a business being worth $100,000 and a similar business being worth $250,000.

The goodwill is the sweat equity that has been put into growing the business, never sell short on the goodwill you, the business owner, bring to a business.

Bob HughesAbout The Author:  Bob Hughes is a business broker in the Coachella Valley area assisting business buyers and sellers of small and mid-sized businesses and commercial real estate throughout the Palm Springs/Coachella Valley area, and San Diego County. You can reach Bob at Hughes Properties via phone at 760-323-8311.


Categories: BizBen Blog Contributor, Business Valuation Issues, Deal And Escrow Issues, How To Sell A Business, Selling A Business



  Helpful Resources To Assist In Selling And Buying California Businesses

Helen Yoo: Escrow & Bulk Sale Services - Southern California

New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.

Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence Services

Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 800-864-0420.

Mark Chatow, Esq.: Legal Services For Buying, Selling Businesses

Mark has a broad range of small business purchase & sale experience from analyzing potential acquisition targets to successfully guiding buyers and sellers through the purchase & sale of small businesses. Mark can assist with contracts, negotiations, legal matters, etc. Reach Mark at 949-478-8393.

Diane Boudreau-Tschetter: Escrow And Bulk Sale Services

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Elizabeth McGovern: Escrow Services - SF Bay Area

McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.

Mani Singh, Business Broker, Southern California

I have successfully represented clients sell & acquire multitude of businesses ranging from Gas Stations, Liquor Stores, Markets, Super Markets, Smoke Shops, Postal Stores, Restaurants, General Retail, Auto and Construction related. Phone me for assistance with selling or buying at 951-296-7646 Cell

Joanne Weber, Broker - Preschool Specialist - Southern California

The Ryan Craig Company is in its 35th year as the recognized expert in Southern California, dealing exclusively in the sale of preschools, Montessori schools, day care centers, and private schools. Our extensive list of references speaks for itself. Phone Joanne at 818-760-3684 for more info.

Michael Davidson, Business Broker - Southern California

Los Angeles Business Broker providing M&A quality services for Small Business Owners. We leverage our technology and expertise to Simplify & Expedite the Business Sales Process. Matching the right buyer with the right business is how we define success.


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