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Three Awesome Ways to Value your Business for a Sale

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Deciding to sell your business you have worked hard for can be tough. You have put a significant amount of time, energy, and resource to keep your business running and ensure its good market positioning. It can take time to sell my business and making the final decision can be even longer before an interested buyer is found.

When deciding to sell a business, you need to ensure you know how much you are selling. This makes it essential to determine your business’ value. But, how exactly can you value your venture? Here’s how:

Identify the Realistic Price

Business buyers do not usually let their emotions get in the way of their purchase so you must be pragmatic. Do not expect to get more from the sale than the real value. However, you also don’t want to get less than it.

Experts can help with business valuation. They will usually weigh things like tangible assets and the intangible elements. But, it is also common to value a business based on a multiple of net profits. In case your business has plenty of tangible assets, an asset valuation will provide you with your assets’ net realistic value minutes the total value of liabilities. However, if you are not sure about the amount to sell your business for, consult with a broker or an accountant.

Consider the Capabilities of your Business

A business that does not rely on the owner is more valuable. Also, buyers will want a business that has a unique system in place which makes it stand out from the competition. The business value increases further when your business can bring significant new product ranges to market.

Get your Business Affairs in Order

Do not start searching for buyers unless your business affairs are in order. This also involves sorting out financial irregularities and ensuring buyers see your company as an opportunity instead of as a risk. Buyers will expect you to have all records in place, prove how much money your business makes, and ensure report accessibility. If you ignore these aspects, you will end up putting off buyers. Think of yourself as the buyer. You want to acquire a company with a good set of books. Hire an accountant who can help you prepare all necessary reports.

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