Our question, when you sell business in Indonesia or buy a business, is this: what are the assets considered to arrive at an accurate value? Here we will look at some of the most common assets. There is a business for sale that the entrepreneurs keep an eagle eye on.

·         FF and E

This abbreviation stands for furniture, fixtures, and equipment. These are the tangible assets used by the business to operate and make money. All businesses (with a few exceptions) will have some amount of FF&E. The value of these can vary greatly, but in most cases, the value is included in the value as determined by the income.

·         Leaseholds

The leasehold is the lease agreement between the owner of the property and the business that rents the property. The agreed-upon leased space typically goes with the sale of the business. This can be a significant value, especially if there is an under-market rate currently charged and the lessor is obligated to continue with the current terms.

·         Contract rights

Many businesses do business based on ongoing contracts, agreements with other entities to do certain things for certain periods of time. There can be immense value in these agreements, and when someone buys a business he or she is buying the rights to these agreements.

·         Licenses

In certain business for sale, licenses do not apply; in others, there can be no business without them. Building contracting is one of them. So is accounting. For a buyer to buy a business, his purchase includes either buying the license to the company or the license to the individual. Often, the buyer will require the access or availability of the license as a contingent element of the sale.

The three main components

When it comes to business for sale, there are three main approaches to value, which are the income approach, the market approach, and the asset approach. There are variations of these approaches, and combinations of them, and things which must be looked at because each and every business will have variations of what gives the business worth.And some of these differences are substantial. First, we must identify the type of sale stock sale or asset sale.

A stock sale is the sale of the company stock

The entrepreneur is buying the company in Indonesia based upon the value of its stock, which represents everything in the business: earning power, equipment, goodwill, liabilities, etc. In an asset sale, the buyer is buying the company assets and capital which enable the company to make profits but is not necessarily assuming any liabilities with the purchase. Most small businesses for sale are sold as an “asset sale”.

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