4-9-25
What’s It Worth??
Since way back in 1983, when I represented and sold the first business for a client, the same question has been asked, “What’s my business worth?”
That’s still the first question business owners want us to answer when we talk about selling their businesses for them.
With the advent of all the internet based offers to represent business owners in the sale of their businesses, it’s time to let you know there are three ways to value a business:
- How much do you want?
OK, sign here!
That’s how many so-called business brokerage firms do business. They’re not interested in helping you understand the market value of your business. They just want to get you to sign an agreement for them to sell and then they’ll let the market beat you up until you either give up or sell the business for whatever you can.
Thats NOT the way to do business, but most business brokers don’t care because they aren’t looking out for the seller, only themselves.
- Pay & obtain an independent, third-party, certified business valuation. This is an excellent way to determine the market value of your business, to help you determine if now is the right time to sell.
There are some things to remember about this valuation technique:
- It will only include the depreciated value of the business assets unless there is a certified equipment appraisal. Business owners know there can be a BIG difference between depreciated value and Fair Market Value.
- Cost can be up to $25,000 for a certified business appraisal
- It doesn’t take into consideration the value of real estate owned by the business or owner.
- Business Broker Market Value Analysis
This technique allows the business owner to work with a trained business broker who has a local presence and can visit the owner and business to really understand the market and dynamics of the business. Trained brokers can utilize various databases of national and regional businesses to help establish a market value for the business that makes sense for the owner and potential buyers.
There is no charge for this service through CBI, but it does require that the business owner provide information necessary to help with the MVA. It will also be all the same information that a buyer and lender will require.
So, there you go, three ways to answer your questions about the value of your business.
The best way to do so is to contact your CBI Team broker and ask them to help you establish the Market Value of your business.
And that’s all I have to say about that…….
From the Artful Codger
https://www.linkedin.com/in/carl-grimes-1006a27/
