What Is My Business Worth?
This is the top question of every business owner when deciding if it is time to sell. Anyone that has ever sold a home knows that an independent appraisal report had to be completed for the mortgage company to complete the sale. A business is many times more complex and usually the single largest asset a person owns. The key to making sound decisions and obtaining full value for your business is to have a viable valuation performed by an independent third-party valuation service. Without this report, a business owner should be prepared for heavy negotiations because it will be your opinion versus the buyer’s opinion.
Be wary of any business broker who prepares his own in-house valuation or tells you “what he can get” for your business. Many times they are simply telling you what they think you want to hear in order to get a listing. In addition, a buyer will place no credibility in that opinion because he has a vested interest in obtaining a higher price than can be justified.
Advanced Business Group uses the services of some of the largest, independent third-party valuation services in America to perform these reports for our clients who are trying to secure full market value for their business. They perform thousands of business valuations each year and have the largest data base of closed transactions in the nation. They know what price other businesses, like yours, are really producing. Their reports are reader friendly and can be shown to prospective buyers. They go much further than just value, they recommend which assets and liabilities to sell and the deal structure that will most likely produce a completed transaction at the best price. On top of that, they will totally justify that the recommended price is best for the business owner and yet realistic for a prospective buyer.
Business brokers have consistently produced higher prices and smoother sales with a valuation than similar businesses produced that did not have the valuation. The reasons are simple: 1) Knowing the value of your business before you go to market allows you to best package and present the company to buyers, 2) Allows us to learn as much as possible about your business without actually working there and thereby being capable of putting your best foot forward when talking with buyers, and 3) Brings a better quality buyer to the table because they know the business has good value.
Valuing a Business-For Other Reasons
- Value Enhancement
- Buy/Sell Agreements
- Gift/Estate Tax
- Family Succession
- Life Insurance
- Shareholder Disputes
- Estate Planning
- Raising Capital
- Business & Strategic Planning
If you or one of your clients is struggling to understand the real value of a business (and the appropriate deal structure to justify that value), then it is likely that decisions are being made that hurt that value! You never have to guess when it comes to something this important. Just contact us.