Who Should not Value your Business
"Beware of agents and business brokers that have a vested interest in you listing your business with them, this is how they make their money. Since they get paid primarily upon sale, for them any sale is better than no sale. Agents and brokers can deflate the value of your business, enticing you to list your business with them." They can also undervalue your business to entice as many buyers in an effort to get inquiries. It is surprising how often we have heard of business owners who have made this mistake because they feel that at last they have met someone who really understands how much their business is worth ... when this isn’t really the case.
A full time business broker who has made selling businesses their profession is generally someone that you would like to think has the experience, knowledge, and skills to be able to help you sell your business. As per the previous point, be aware that they have a vested interest in getting you to list your business with them. It is always good to understand how they make their money; often paying up front for a valuation is a better way of getting an accurate one.
Backyard Barbecue "Business Valuation"
Sadly, this is one of the most common forms of business valuations. Standing around the BBQ, someone with little or no experience and a very strong opinion will try and tell you what your business is worth. “BBQ stories” often include inflated figures or leave out the details like the payment terms and commitments the seller had to make to get the amazing selling price. Be careful of asking the wrong person for the right advice.
Online business valuations
There are a number of online business valuation tools, the challenge with these are ‘rubbish in, rubbish out.’ The results will vary depending on the quality of the information you put in, but also the rigor behind the actual calculations. For example, a business is more likely to sell for a higher value in a major metropolitan area that is booming, versus a similar sized business in a small regional town that is having it really tough. These online tools won’t disclose how they calculate the value of your business, however based on the type of information that you are required to input can give you some indication of the value of your business.
Merger and acquisitions specialists
Usually merger and acquisition specialists get involved with larger businesses. What is very important here is being clear on who they are working for and how they make their money. If you get approached by someone on behalf of another company that may be interested in buying your business it is highly likely that they are working for the potential buyer of your business and have their best interests at heart, not yours.
3217 E Carson St #1013 Lakewood, CA 90712
Web Support email@example.com