Selling your business is more complicated than just multiplying your earnings by the number of years you plan to stay in business. While it’s a good ballpark formula, there are a lot of other variables that go into providing a good value for a business for sale.
For example, what are your outstanding liabilities? What’s your overhead? What does the total market look like, and are you expecting growth or contraction? All of these factors figure in to a business’ ultimate value.
It’s hard to figure out, but it’s not impossible. Allan Michael Group has the expertise and know-how to figure the valuation of your business, taking the many factors into account, and helping you come up with the best value.
There are a few things we need to do to determine what your business is worth:
- Determine Your Assets: This not only includes your monthly revenue, but any of your equipment, software, building, vehicles, and so on.
- Your Revenue: The quick and dirty method is to multiply your revenue by some unspecified value — it’s unspecified because it varies from industry to industry, region to region. There are industry standards as well as regional variables that can affect what your value multiplier is, so this is why it’s important to work with a business valuation professional. Allan Michael Group can help discover these variables.
- What’s the “Goodwill” Of Your Business? This is especially hard to determine on your own. It’s your reputation within your industry and your community. How well is your business regarded? What sort of name recognition does it have? How do people react when they hear your company name? It’s also the quality and depth of your customer list, and even your employees. A qualified business broker can help you determine the goodwill of your business, which can play a big role in determining your companies value.