If you are considering selling in the next few years, it’s essential to get a realistic idea of what your business is worth.
In our experience working with business owners, on an often daily basis, most people do not take the time to sit down and look at their financials year over year. They just know whether they’re making money or not. We’ve also found that, for most people, their business is the result of a lot of blood, sweat, and tears. This makes it difficult for business owners to be objective about valuation because they’re so personally invested in it.
There are certainly many factors that go into the valuation of a business. However, at the end of the day, it comes down to what a buyer is willing to pay and what the seller will accept for it.
The Science of Business Assessment
When we begin working with a business owner, we start by doing a full assessment of the current value of the business. This gives us a big picture view so we can advise the owners on what steps they may need to take to improve the value or advise what they could do to improve the financials.
In our experience, figuring out the value of a business is a combination of science and art. The science element involves formulas that use historic data to make predictions about future earnings.
While anyone can crunch the numbers and come up with figures to show a business’s worth, these can be misleading. For instance, it can be hard to get accurate data if the business has not kept careful financial records (which is more common than you’d think). Another downfall of these methods is that they make it easy to make assumptions about what the future will look like, but may fail to account for factors such as the company’s debt structure, financial outliers or intangible assets.
The Art of Business Assessment
The art of valuing a business takes into account many important factors including current market trends, availability of suitable buyers, and much more. This is why it is crucial to have experienced business advisors involved in the business assessment process.
Because of our decades of experience in advising and brokering business transactions, we know how to evaluate these intangible factors as they relate to your business’s value. We use data and our extensive market experience to assess your business and give you an accurate picture of what it’s worth.
As business owners, consultants and business brokers with decades of experience, we have our finger on the pulse of the market and can give insight into what selling your business could look like. Most importantly, we have the resources and the know how to get your business in the best shape possible so it’s ready to sell when the time comes.
Are you ready to know the true value of your business? It all begins with a Business Assessment. Learn more here about this process and contact us to schedule a consultation.
Click here to get our monthly newsletter and receive our free guide: Essential steps to take now to prepare your business for a potential financial downturn.
