[email protected]
(800) 239-5085
Schedule a Demo
  • Home
  • About
    • Who We Are
    • Our Story
    • Our Team
    • Testimonials
  • Features
    • Industry Websites
    • Professional Content
    • Digital Marketing
    • Lead Capture Tools
    • Sales CRM
    • Deal Management
    • Integrated Workflows
    • Listing Promotion
    • Branding & Design
  • Resources
    • Blog
    • Media Kit
    • Webinars
    • Training
      • Adding Internal ID to Listing Sites
      • Managing Listings / Recent Transactions
      • Managing the Online NDA
      • Managing Lists & Creating Contacts
      • Listing Automations
      • Outlook Forwarding Rule
      • Gmail Forwarding Rule
      • Automating buyer creation through listing site inquiries
      • The online NDA process
      • Managing Buyer Contacts
      • Buyer Deal Management
      • Pipeline and Deal Stage Management
      • Seller Prospect Management
      • Contact List Type Management
      • Advanced Contact Search
      • Setting up Calendly
  • Packages
  • Contact Us
  • Home
  • About
    • Who We Are
    • Our Story
    • Our Team
    • Testimonials
  • Features
    • Industry Websites
    • Professional Content
    • Digital Marketing
    • Lead Capture Tools
    • Sales CRM
    • Deal Management
    • Integrated Workflows
    • Listing Promotion
    • Branding & Design
  • Resources
    • Blog
    • Media Kit
    • Webinars
    • Training
      • Adding Internal ID to Listing Sites
      • Managing Listings / Recent Transactions
      • Managing the Online NDA
      • Managing Lists & Creating Contacts
      • Listing Automations
      • Outlook Forwarding Rule
      • Gmail Forwarding Rule
      • Automating buyer creation through listing site inquiries
      • The online NDA process
      • Managing Buyer Contacts
      • Buyer Deal Management
      • Pipeline and Deal Stage Management
      • Seller Prospect Management
      • Contact List Type Management
      • Advanced Contact Search
      • Setting up Calendly
  • Packages
  • Contact Us
  • Home
  • About
    • Who We Are
    • Our Story
    • Our Team
    • Testimonials
  • Features
    • Industry Websites
    • Professional Content
    • Digital Marketing
    • Lead Capture Tools
    • Sales CRM
    • Deal Management
    • Integrated Workflows
    • Listing Promotion
    • Branding & Design
  • Resources
    • Blog
    • Media Kit
    • Webinars
    • Training
      • Adding Internal ID to Listing Sites
      • Managing Listings / Recent Transactions
      • Managing the Online NDA
      • Managing Lists & Creating Contacts
      • Listing Automations
      • Outlook Forwarding Rule
      • Gmail Forwarding Rule
      • Automating buyer creation through listing site inquiries
      • The online NDA process
      • Managing Buyer Contacts
      • Buyer Deal Management
      • Pipeline and Deal Stage Management
      • Seller Prospect Management
      • Contact List Type Management
      • Advanced Contact Search
      • Setting up Calendly
  • Packages
  • Contact Us
  • Home
  • About
    • Who We Are
    • Our Story
    • Our Team
    • Testimonials
  • Features
    • Industry Websites
    • Professional Content
    • Digital Marketing
    • Lead Capture Tools
    • Sales CRM
    • Deal Management
    • Integrated Workflows
    • Listing Promotion
    • Branding & Design
  • Resources
    • Blog
    • Media Kit
    • Webinars
    • Training
      • Adding Internal ID to Listing Sites
      • Managing Listings / Recent Transactions
      • Managing the Online NDA
      • Managing Lists & Creating Contacts
      • Listing Automations
      • Outlook Forwarding Rule
      • Gmail Forwarding Rule
      • Automating buyer creation through listing site inquiries
      • The online NDA process
      • Managing Buyer Contacts
      • Buyer Deal Management
      • Pipeline and Deal Stage Management
      • Seller Prospect Management
      • Contact List Type Management
      • Advanced Contact Search
      • Setting up Calendly
  • Packages
  • Contact Us
Blog
Home Seller Articles Obtaining a Fair Market Value for Your Business
Seller ArticlesSelling a Business

Obtaining a Fair Market Value for Your Business

Deal Studio January 23, 2019 0 Comments
Businessman Using Tablet To Teach And  Analysis The Situation On

Divestopedia published a rather insightful article, “Letting the Market Bridge the Valuation Gap.”  In this October 2018 article, Dave Kauppi dives in and explores how fair market value can be used as a way for business owners to “bridge the gap between the valuation they feel they deserve and that which they’re likely to receive.”  This, of course, increases the chances of a deal actually taking place.  Let’s turn our attention to some of the key points in Kauppi’s informative article.

Understanding the Reality of Selling a Business

One key point is that only a low percentage of businesses actually sell on their first attempt.  The article points out that a mere 10% of businesses that are for sale are actually sold three years later; this is a simply brutal fact.  Few facts, if any, help underscore the value of working with a business broker more than this point.  Selling a business can be difficult under even the best of circumstances.  The process is complex, and most sellers have never actually sold a business before.

Divestopedia believes that it is critical for business owners to have realistic expectations regarding valuation.  As the article points out, the market doesn’t care “how much money you need for retirement,” or how much you’ve invested.

Four Points to Consider

According to the article, it is important that business owners understand that a few business characteristics will ultimately drive the sale.  There are four key factors to consider: contractually recurring revenue, durable competitive advantage, growth rate and customer concentration.

There is a lot packed into these four points, but here are a couple of big takeaways.  In terms of customer growth, if a large percentage of your business is derived from a single customer, then that is going to be seen as a problem.  As Divestopedia points out, if your company is dependent and partially dependent on a single customer, then you can expect a lot of pressure for you, as the business owner, to stick around a lot longer to ensure that this key customer isn’t lost.  If intellectual property, such as software, is involved, then things can get even more complex.  In the end, determining value in technology-based companies can be more challenging.

In the end, working with a seasoned business broker, one that understands valuation and how best to get there, is a must.  You want to receive the best possible price for your business.  An experienced business broker will help you understand how to navigate the complex process of determining a price.  However, and most importantly, a business broker will help you achieve a fair market value, so that your business doesn’t remain unsold for years.

Copyright: Business Brokerage Press, Inc.

zeatrue/BigStock.com

6
1118 Views
Determining Your Company's Undocumented ValuePrevDetermining Your Company's Undocumented ValueJanuary 16, 2019
5 Big Questions to Consider when Financing a Business SaleJanuary 30, 20195 Big Questions to Consider when Financing a Business SaleNext

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recent Posts
  • Tackling Growth Delusions When Buying a Business December 11, 2019
  • Understanding Corporate Social Responsibility (CSR) December 4, 2019
  • Understanding M&A Purchasing Agreements November 20, 2019
  • Key Mistakes that Could Impact Your Sale November 13, 2019
  • Exploring the Offering Memorandum November 6, 2019
Categories
  • blog 9
  • Buyer Articles 64
  • Buyer FAQ 11
  • Buying a Business 30
  • Content 1
  • Financing the Deal 8
  • General Business Brokerage 9
  • Marketing 1
  • Marketing for Business Brokers 1
  • Promotion 1
  • Seller Articles 176
  • Seller FAQ 23
  • Selling a Business 181
  • Uncategorized 37
  • Using a Professional 6
  • valuation 15
  • Workflows 1
Tags
bbp campaigns digital signature marketing meta description nda recent transactions seo tags targeting tombstones

Deal Studio - Elevate Deal Making

Automate, accelerate and elevate your deal making
Email [email protected]
Phone (800) 239-5085
Request Media Kit
Features
» Industry Websites
» Professional Content
» Digital Marketing
» Lead Capture Tools
» Sales CRM
» Deal Management
» Integrated Workflows
» Listing Promotion
» Branding & Design
Recent News
  • Tackling Growth Delusions When Buying a Business
    December 11, 2019
  • Understanding Corporate Social Responsibility (CSR)
    Understanding Corporate Social Responsibility (CSR)
    December 4, 2019
  • Understanding M&A Purchasing Agreements
    Understanding M&A Purchasing Agreements
    November 20, 2019
Newsletter
Terms of use | Privacy Policy

© Copyright 2019 Business Brokerage Press, Inc. All Rights Reserved.