Valuation: How Much Is My Business Worth?
How much is my business worth?
The only correct answer is:‘The amount that a reasonable and qualified buyer is willing to pay!’ So…
Setting the right price with the right terms are the most critical factor’s in selling any business.
If the price is too high, your business won’t sell. It doesn’t matter how good the business is or how much potential the business has, it won’t sell.
If the price is too low, you may be leaving money on the table.
The only way to price the business right is to do an independent third party business valuation. This is not a “best guess” or “ballpark estimate”. And it’s not telling you the number that you want to hear. This is a serious effort at arriving at a real value with documentation and facts.
Can you imagine buying or selling a home without knowing its value based on an independent appraisal? You won’t buy a home with the price based on what the owner thinks it’s worth or how much he wants to make on the sale. You need to be comfortable that the asking price is based on something verifiable. Banks won’t approve a home mortgage unless its value is based on an independent appraisal.
It’s no different with the asking price on a business for sale. No one will will buy a business unless they are comfortable that the price is based on a value that was determined by an independent, unbiased third party that is qualified to make the valuation.
Atlanta Advisory works with several reputable independent third party valuation firms and serves business owners nationwide. Atlanta Advisory will work with you to gather all of the information and documentation needed for the valuation. A valuation is the basis for knowing that the business is priced right. Your business won’t be priced so high that it will never sell, and you won’t be leaving money on the table when it does. Potential buyers will have confidence in the extensive documentation that is provided, and will be dissuaded from doing their own valuation that will always be skewed to the buyers advantage and show a lower value and lower price for you.
The cost of not doing an independent third party business valuation is the reason to make the investment in having one done! It won’t cost you money, it will make you money.
If you’re serious about selling your business, Atlanta Advisory will work with you to price your business right.
Other reasons to do a business valuation:
- A Market Valuation Analysis (MVA) report provides a business owner with an essential business tool and reference for any of the following reasons:
- Provide a benchmark value to analyze business, operations, tax reporting and strategic planning for future goals.
- Review business in the eyes of a prospective buyer.
- Strengthen and enhance banking relationships and loan negotiations for both business and personal lending with to-date and documented Personal Financial Statement.
- Pre qualify a business for a preferred SBA loan for owner or buyer.
- Maximize vendor and supplier terms.
- Documented base value for multiple insurance applications.
- Report to investors in a private firm.
- Plan for a merger or stock offering.
- Position businesses in a posture to timely acquire competitor or complimentary business.
- Determine a base value for Buy-Sell Agreement and Partnerships.
- Estate and Trust planning.
- Inheritance tax.
- Charitable contribution.
- Prepare to sell business; the first and most important step in packaging.
The most important factors in selling your business are the price and terms that you set. They need to be realistic and based on solid verifiable and documented facts. That’s why a business Valuation is a critical starting point if you are serious about selling your business.
Let’s talk, and we’ll be able to tell you more. Get In Touch