» The Truth About Selling Your Business Yourself – Part 4

What Business Broker's Don't Want You to Know
Categories: Sell a Business

Truth #4: Valuing Your Business Properly Maximizes Your Price.

Many business owners are in awe when on the other end of the phone someone is saying, “I am interested to buy your business, would you consider selling?”

All kinds of thoughts swirl in your head: What is it worth? Will they offer me enough? Are they serious? Can I really sell it?

Buyer Are More Educated

Often, buyers are significantly more educated on the process of valuing a business because they have been looking at similar businesses and they have a sense of what a business is worth. This gives them an instant advantage.

Often when a seller is asked, “How much would sell a business for?” The seller is not sure what to say. They have never had their business valued and they are afraid to say a number too low and under value the business.

Know the Value of Your Company

The solution is to have your business valued by a third party before you consider selling and blurt out a number that you will regret later.

Depending on the type of business you have, there are many valuation techniques that can be used to determine the value of a business.  But often just a valuation does not answer the question, can I sell? Or What price do I need to sell at?

Also, your business will have multiple values depending on the buyer that you are working with.

 Two Types of Buyers

There are two types of buyers, financial and strategic.

  • A financial buyer is many times a person who comes from corporate America and has always dreamt of having their own business. They are looking at the business as “buying a job” and want to base the value based on how much profit the business earns per year. They are very interested in the financials of the business.
  • A strategic buyer is most likely already a business owner that owns a business in an industry that is closely related to what you do and they see the acquisition of your as significantly more than just the profit it makes, but as an opportunity to open additional revenues streams, consolidation or new markets. To these buyers, your business is worth significantly more than just its financials. And often they pay more for a business because of this.

Because a business sale is much more than just the price, you will want more than just a traditional valuation done.

Business Valuation and More

At RPR Associates we offer an exclusive product that offers the following:

  • Business valuation (that will stand up to the bankers and loan officer requirements)
  • Deal Structure Scenarios (how might you sell your business)
  • Net Income after paying taxes on the sale of the business
  • Estimated income from the sale of your business on a yearly basis including all your assets.

This one of kind tool truly allows you to answer the question, can you sell and at what price?

The Truth About Selling Your Business

TRUTH: Getting business valued before determining a sale price will help you maximize your sale price.

TRUTH: Knowing the possible values of your business along with your estimated net income from the sale and long term income can help you know what price is the right price for you.



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Posted on Jan 15, 2014

Contact Info – David Bandars

 12110 Port Grace Blvd. #201, LaVista, NE 68128