Business valuation: what you should know before selling

Find the right reasons for valuation

An accurate valuation is essential for several reasons. First, it prevents the owner from losing money, and second, it can work to put a reluctant buyer at ease. Before working with a brokerage and getting a valuation, clean up your company’s finances. It may take time and effort, but it will pay significant dividends in the end. if you are thinking of hire a business brokerCGK Business Sales team is always ready to help.

Appraisals help sellers get fair market value and increase the chances of a successful sale.

Of all the reasons to get an appraisal, this is one of the most important. Many owners, especially those with small and family businesses, rely on sales to fund future opportunities or enjoy a more comfortable retirement. We’ve all heard stories about owners who sold their businesses for far less than their market value, as well as those who priced their businesses too high and couldn’t find a buyer.

While hiring an appraisal specialist can be expensive, it is a good long-term investment because of the future savings it generates. When a business is accurately valued, owners will be able to time sales appropriately, increase their bargaining power, and increase potential profits.

A business valuation will help a homeowner make more informed decisions

When valuing a business for sale, it is important consider the right factors. Accurate ratings allow owners to assess performance and measure changes over time, which in turn provides them with the information they need to make strategic decisions.

The valuation process provides a holistic view of a business, helping potential sellers make decisions that increase their return on investment. An appraisal will not only prevent you from making the wrong decisions, but it will also prevent the consequences that may follow.

Make a fancy exit

When done correctly, business valuations provide homeowners with a baseline from which other efforts can be launched. The information gathered during a valuation will let you know if the sale is going in the right direction or if improvements need to be made before the business goes on the market.

The baseline shows prospective buyers how well the business is performing, which can reassure those who aren’t sure. Doing an appraisal is like taking the pulse of a business, and is especially beneficial when an owner is looking to increase profits before the sale takes place.

Succession Plan Management

In some cases, business owners sell to family members. Alternatively, you may want to sell to a strategic buyer who can use existing income streams to generate more profit. No matter who the business is for, it is still important to know its real value.

Helping business owners accurately value their companies

A company’s valuation can serve multiple functions, including ensuring higher profits and providing a degree of peace of mind to buyers and sellers. If valuations are used correctly, potential owners and buyers will know exactly what to expect from a business. Call the CGK Business Sales team for help and advice on valuation.

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