Finding the Right Price
If you’re ready to sell your business, you’ll certainly want to make sure you get the best price possible, which reflects all the love and hard work you’ve invested over the years in to growing it. Selling a business is no small thing and it’s important to have it valued accurately. Over valuing will most likely result in a no sale and reduce potential purchaser confidence. Under valuing will no doubt attract interest but could leave you well out of pocket and extremely unhappy with the end result.
Testing the Waters
There are a number of ways to value your business. In some cases vendors will estimate a price they would like and see if anyone is interested. This might be ok if you’re just testing the waters and in no real hurry to sell. There’s also no guarantee this approach will result in an accurate valuation of the entire business and sales results may not be the best.
A logical step is to value all your assets both tangible – stock, equipment and furniture and non-tangible such as brand and copyright value, employees and any existing contracts. This will give you a much clearer idea of what your business is worth but still may not be a totally accurate valuation.
There are several formulas that are available for certain businesses, or you could shop around and see what other similar businesses on the market are charging, to get a better idea of a price. You could also use a combination of all of these methods and come up with a reasonable valuation of your business.
Independent Business Valuation
If you really want sales results you’ll need an extremely accurate valuation that reflects current market trends. The best way to get this is by employing a professional independent business valuer or broker to help you set the most realistic price and maximise your sale potential.
When you’re looking for an appropriate business valuer you’ll need someone with experience across small, medium and large business over a range of industries. Ideally they will be highly recognised by the business sector, major financial institutions, legal bodies, government departments and business units, and local municipalities.
By having this kind of experience, knowledge and recognition in a business valuation expert, will ensure the most comprehensive results and equitable price for your business as well as increased buyer interest.