Brindabella Business Brokers

You have made the biggest financial decision you will make – you have decided it is time to sell your business.  Now what is the market going to give you for all your time and hard work?

 Before you can determine what price to put on your business, you first need to understand what category your business falls into:

1. Fit out – business formula does not work i.e. not profitable, the business has limited financial information or the financial information just does not make sense.
2. Business is a job – your business provides you a good salary but like a job, if you are not there it makes nothing.  You are the business.
3. Business with owner involvement – owner works in the business however profitable enough to pay the owner a good salary and still show excellent business profits.  Could be changed to run under management.
4. Run under management – owner works on the business and not in it and profitable.

 It is really important you classify your business and be true to yourself as to what you have to sell.  You will see as you step down the categories you would expect the market price achieved for each business would increase.  But like anything that is for sale, you are selling what you can show the market now and not what the business potentially could be.

No business will sell if it does not have potential; however potential in the majority of cases does not increase the sale price you will achieve.  Reason being the potential will only be achieved by the buyer who invests their own money and hard work and there is no guarantee of success.

If the business has been good to you and your family, you need to ensure that you leave enough on the table for the next buyer.  If you try to price your business in a category above what it is now, buyers are going to continue to look at your business but move onto something else, as the numbers simply will not add up.