Quick Advice Articles For Sellers – Valuing Your Business For Sale
Should I get my business valued? Even if you feel that you are confident you have a reasonably good indication of the value of your business, by getting a second or even third opinion will help to either confirm or reassess your own thinking and valuation of your business.Having an accurate, rather than an estimated valuation will put you in a strong position during the negotiation process and will give you a solid grounding on when to make the right market decisions during key points of the selling process. Knowing the true value of your business can only improve your ability to sell it and give you the confidence to follow your convictions in any negotiations over sale price.Can’t I value my business myself? Nothing says that you cannot decide to go with your own valuation when placing your business up for sale however you must consider whether your valuation is based on objective facts or more on a hunch.There’s a whole array of points to consider before getting a true market value. Turnover, gross and net profit and cash flow will all influence the selling price, not to mention the ‘goodwill’ value of your business which in many cases is the most important factor of all. Is your business in a prime location? How is the economic landscape and what competitors do you have?Unless you have a great deal of experience in this field, self-valuations can invariably be way off the mark! It pays to get a professional in to look over your accounts, understand your business and then give you an objective point of view. It could save you a lot of time, money and disappointment.Who should I contact to get a business valuation? Good question. Business transfer agents (brokers), accountants and chartered surveyors can all help you with a business valuation. If you are looking to sell your business then it would pay to speak to a broker, seeing that selling businesses is their specialist field.Valuations provided by brokers in many cases do not cost you a penny! However there is always a catch – most brokers will expect you to sell your business through them in return for a valuation so check the small print beforehand if you intend to go it alone.It may also be wise to get a second opinion to see if the valuation stacks up. It’s also good for your own peace of mind. If you have an accountant already in place, let them know of your intentions and ask them to give you their opinion and valuation of your business. They will have seen the detailed figures so they will know exactly how much money you make!How is a valuation calculated? A broker will usually rely on their knowledge of the local market and their experience of previous comparable business sales to give you an accurate estimate of what your business is worth. They will analyse your businesses financial and geographical position as well as demand for your type of business on the marketplace.In some cases, they will already have a number of potential buyers who have registered an interest in buying a business such as yours.