Use Hard Data to Determine Your Business Value
One of the first steps in the process of selling a business is determining the asking price. Your company’s fair value involves many hard and fast figures, but business owners tend to let their emotions influence the price point.
An important step in the process is to get a proper business valuation from a professional. This is the best, most accurate way to determine the price you can expect. In the meantime, you can use the tips below to get things started.
- Savvy buyers want to know your cash flow, not your revenue. Any experienced buyer who will be a good fit to take over your business will know that high revenue doesn’t necessarily equate to good cash flow.
- Make sure you can detail where profit comes from. Buyers won’t just take your word for it. They want to see evidence to back up claims you’re making about your profits. Ensure you have the figures available, for both the revenue coming into your business and the cost of monthly upkeep.
- Don’t factor potential into your price point. You may perceive potential in your business. And great things may very well be in store for your company. However, a rosy outlook has no place in your price point, you need to only view your company for what it is today. If potential buyers wanted to build a company from the ground up, they wouldn’t be seeking out a business for purchase.
- Assemble formal financial records from the past three years. Make sure you have easy access to your cash flow statement, income statement, balance sheet, seller’s discretionary earnings statement, and any other financial records, dating back three years and going to the present.
- Think objectively. It can be tricky to think of your business value without factoring in the work and time you’ve put into it. While hard work is admirable, it doesn’t directly translate to an increase in offers.
- Don’t forget the basics! Account for the obvious items that are included with the business, such as equipment and supplies.
The Bridlebrook Group Will Determine Your Business Value
Selling your business is a long, involved process. The Bridlebrook Group can take a huge amount of stress off your shoulders by taking care of the sales process. This way, you can focus on running your business without having to worry about selling and running it simultaneously.
When you work with The Bridlebrook Group, you take the guesswork out of pricing your business. To get started with our services, give us a call at 610-325-7066 or request a free value analysis with The Bridlebrook Group.