Variables Surrounding the Business Sale Price

The sale price of a business is the price that a willing buyer will pay, and a willing seller will accept. Both parties are assumed to act in full knowledge of all the relevant facts, and neither being under compulsion to conclude the sale.

There are many variables that will adjust affect the asking price and negotiated sale price of a business.

• Buyers bring motives, investment standards, risk tolerances, concerns, plans and projections.
• Sellers must remember that a professional valuation is an opinion of a price at which a typical buyer should pay for your business. It does not take into account the negotiating skills of the seller or buyer and/or their individual objectives.

Business issues which will impact valuations:

• Cash Flow
• Condition of the assets
• Perceived risk
• Ability to assign a value to intangibles
• Sustainability projections
• Quality of records and documents
• Customer concentration
• Dependence on owner
• Quality of employees