Your Business Sold

Business Valuations – How are businesses valued?

The single most important point on valuation is YOU.

There are a number of ways businesses are valued and you will find lengthy explanations elsewhere on the web and in business textbooks. Your accountant will also offer views on value based on the balance sheet or the cash generated by the business as profit.

It is important that you check thoroughly how your selected business brokers undertake their role, what their size and scale is (big is not necessarily beautiful in this case) and what fees they charge.

For selling purposes a broker will look to identify the maximum value by examining in detail the profit and loss account of the business, making adjustments to the profits to reflect non continuing costs and applying a potential industry multiple.

Therefore where you are engaging a firm that promise to advertise you should expect to pay only for the cost of advertising and handling the responses.This should be a flat fee.

However, the single most important point on valuation is YOU. - What do you want as a minimum for your business to make it sensible to sell it?

Your minimum sensible sale price, this is a discussion any broker should hold with you and be candid about your chances of success.

You should be prepared to incentivise your broker to achieve higher values than your minimum. Ask your broker ‘how he will achieve maximum value’?

What do I need to know about selling my business? How can I avoid common mistakes?

It is important to understand:

• What your options are
• What is a business broker?
• What are the different types of broker?
• What do business brokers charge?
• Business valuations
• How much is your business worth?
• Should you go it alone?
• How does advertising work?
• What should I pay to advertise?
• Do’s and Don’ts, common mistakes made when selling a business
• How do you get maximum value?
• What is an exit strategy?