Business Valuations

One of the most important strategic planning tools for future growth and a potential exit is understanding the value of your business today. Surprisingly, over 90% of business owners have no understanding of what their business would sell for today. Relying on internet research, anecdotal information from friends, family, or advisors is not only flawed but can be devastating when it comes time to sell. Why? If your retirement or the next stage of your life is dependent on the value of your business and you do not have an understanding of the value, or worse, you have an inflated sense of value when it comes time to sell you will have a huge gap between what you need and what you will actually realize in exit value.

When a business owner contacts us to learn about the sale process, many times they will state that they are ‘Ready to Sell’. While an important part of the equation, what is more important is ‘Is the Business Ready to Sell?’ This is not only dependent upon the financial value at exit but more importantly, is the business positioned to realize the highest price possible, or, is the business actually saleable. Two businesses in the same industry and geography with similar revenues and profits usually are not priced the same (especially if one business owner sought the advice of a Business Broker a few years in advance). Worse, one of these business could be unsaleable.

It's hard to reach a destination without knowing where you are starting from. When you understand the value drivers for a sale (and act on them!) you will not only increase the value when it comes to sell but you will reap the financial rewards of increased profits along the way.

Whether the value determination is for strategic benchmarking, exit timeframe planning, or simply understanding the value of your largest asset should circumstances force you to sell, this is one of the most important actions you can take now to ensure the future that you dreamed of.

People check the value of their investment portfolios annually, monthly, weekly, and sometimes daily, yet fail to check the value of their largest investment. Savvy business owners know the value of the business and you should as well.

Check out a sample of our Broker’s Opinion of Market Value. Not only does it provide the value range but includes details about your business to ensure that when it’s time for an exit you are prepared and ready.