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How Much Can I Sell My Business For?

Sunday, August 18, 2013 · 3 Comments

 

 

As a small business owner you understand all the facets that go into your business. It is important to consider what is included in the sale and what price you can expect to receive. During the evaluation process, you will question.. How much can I sell my business for? Businesses are more complex then real estate. Establishing a price isn’t as simple as comparing recent sales, as no 2 businesses are the same. You should have your financials evaluated and speak with professionals to establish a fair market value for your business.

How to answer the question... "How much can I sell my business for?"

#1 Talk to your Accountant! They will look over your financials from the past 3 years and determine how much the owner has made and establish a valuation based on that and any other assets or income they feel is important to the businesses financial position.

#2 Talk to 2-3 Business Brokers! After you have the accountants valuation, go and speak with a few business brokers (without revealing your accountants price point). The brokers will look over your financial documents and give you an estimate of what your business could sell for in the current market conditions.

#3 Comparable - Look at other similar businesses and see what they are advertised for sale at. If you own a cafe, see what price range cafes in your area are selling for... why are some higher then others, and estimate where your business may sit in comparison.

#4 How much money do you need to cover loans, future plans etc. - make sure you have an understanding of this value.

#5 How much will the buyer spend? If you were a buyer looking at your business, how much would you be willing to pay for it. How long will it take them to recover the costs of buying the business?

Hope this helps you in establishing the price for your business! Seeking professional help from an accountant, solicitor or business broker is important in the sales process. Whether you decide to sell a business privately or with a business broker its important to have your business valued appropriately.

Best of luck in selling your business,

Vanessa Lovie

3 Comments

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