How to Use a Valuation to Set Your Initial Price
A valuation is used by the Seller as a guide to help determine the selling price. The valuation provides the Seller with a defensible position to support the asking price for their business with the final sale price being influenced by:
- Market situations
- Personalities
- Timing
- Emotional value assigned to the business by the owner/seller
Emotional Value vs Market Value
A valuation can make or break a business sale for many sellers. Attaching a dollar value to one’s company is a sensitive subject–especially if the owner has spent years building the business from a start-up to a profitable enterprise. Without an independent viewpoint, the valuation process can quickly devolve into a pricing routine that is rooted in personal attachments and other subjective inputs rather than solid data based on marketplace and economic realities.
However—the actual value of your business is the amount someone is willing to pay for your business. PERIOD. Personal feelings about your company’s worth are far less important than sound valuation methodology, accurate documentation, seller financing and other factors that could potentially influence value.
Determine value – then increase value!
The experts at BizValuation will help you understand the current value of your business. However, the valuation also provides information that can help you INCREASE the value of your business. Our findings will provide information on specific aspects of your business – offering improvement opportunities that may ultimately increase the sale value of your business.