How business valuations can help you maximize profit when selling your business

Bruce Roher • August 07, 2017

Whether you’re looking to sell your business or you’re considering an unsolicited offer, one of your first steps should be to obtain a professional business valuation.

A business valuation provides a snapshot of the value of your business, which can give you a sense of the amount you can expect to receive, or help you assess offers from potential buyers. In either case, the valuation provides you with a good benchmark for establishing value expectations.

Business Valuations Help You Manage Expectations

Starting with a business valuation allows you to establish an asking price based on fair market value. If you approach a potential buyer with an unreasonable price, you risk reduced negotiation power with the buyer – or even worse, you risk losing the potential buyer altogether.

Of course, if a valuation reveals that your financial prospects from selling the business are not as great as you originally hoped, you may choose to lower your expectations or hold off on selling the business until you can prepare it more effectively for sale at a higher price.

An Advisor Armed with a Business Valuation Can Make Informed Recommendations

A business valuation expert may uncover risk areas that may negatively impact the sale value, as well as potential opportunities to increase your company’s perceived value. Much like when selling a home, making sustainable improvements prior to sale can often add far more value than they cost. These may include strategies such as reducing overhead, strengthening middle management, and closing underperforming divisions.

A Valuation Can Help You Time Your Sale

It may be worthwhile to wait for the optimal time to sell your business. The best time to sell your business is always while it’s doing well. Current and anticipated future performance play a significant part in perceived value, so you want to make sure that you’re selling while your business is performing well.

Once you have made the decision to sell your business, it’s important to establish your team of financial advisors who are experienced in the sale process. Your financial advisor will represent you throughout the sale process to help you realize your objectives.

If you’re considering the sale of a business, make sure to get expert business valuation and financial advisory services from a trusted business advisor. Contact us today.


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