Business Valuation

WHAT IS MY BUSINESS WORTH?

Firstly, it’s important to understand the difference between Value and Most Probable Selling Price (MPSP). Briefly, the MPSP is the price which represents total consideration of the business including compulsion on the part of the buyer or seller. This number can be vastly different to the fair market value of a business when no underlying motivations are at play.

For example, two identical businesses for sale where one owner has health concerns.

Secondly, there are many ways to calculate the MPSP, Percentage of Annual Sales, Value of the assets, a multiple of net income, a multiple of EBITDA, a multiple of SDE, net present value of projected cash flow, etc.

Selling Process

How do I sell my company?  This is the most common question that business owners face.  One misconception is that selling a business is similar to selling real estate – it’s not!  Selling a business is more like planning a wedding.  There are many stakeholders involved who all have opinions, and sometimes conflicting agendas, which is why we’ve developed a five phase process that gets you across the finish line.   We make the process, simple, straightforward, and efficient by sharing with your our experience and best practices to help you avoid very costly and painful mistakes.


Business Valuation

WHAT IS MY BUSINESS WORTH?

Firstly, it's important to understand the difference between Value and Most Probable Selling Price (MPSP). Briefly, the MPSP is the price which represents total consideration of the business including compulsion on the part of the buyer or seller. This number can be vastly different to the fair market value of a business when no underlying motivations are at play.

For example, two identical businesses for sale where one owner has health concerns.

Secondly, there are many ways to calculate the MPSP, Percentage of Annual Sales, Value of the assets, a multiple of net income, a multiple of EBITDA, a multiple of SDE, net present value of projected cash flow, etc.

SELLING PROCESS

How do I sell my company?  This is the most common question that business owners face.  One misconception is that selling a business is similar to selling real estate - it's not!  Selling a business is more like planning a wedding.  There are many stakeholders involved who all have opinions, and sometimes conflicting agendas, which is why we've developed a five phase process that gets you across the finish line.   We make the process, simple, straightforward, and efficient by sharing with your our experience and best practices to help you avoid very costly and painful mistakes.

The most difficult thing is the decision to act. You can do anything you decide to do. You can act to change and control your life; and the procedure, the process is its own reward." - Amelia Earheart

FAQ

FREQUENTLY ASKED QUESTIONS

The average sale takes approximately 6-8 months. Many factors come into play. This is why we prepare a timeline that is communicated to all relevant parties and we manage the schedule ensuring a smooth transition.

There is a lot of information online about this topic, but quite simply, a vender note, also known as Vender Take Back (VTB) is a loan that you provide to the seller. The earn-out is an agreed-upon amount that you receive which is based on the future performance of the company. There are risks associated with both so be sure to seek professional legal advice.

As part of the negotiations, it is typical for a buyer to request a period of training. This is very common and in the best interest of everyone. The amount of post-close training depends on the type of business, experience of the new buyer, and how prepared the business is to operate without you.

The success fee is on a sliding scale based on the value of your business and the complexity of the transaction. We only receive payment upon the completion of the sale.

There are many reasons why you would choose to use a broker instead of doing it yourself. Here are the three most common reasons:

Time: Each phase of selling the business can take 100s of hours. Imagine talking to 20-30 potential buyers about your business, spending 20mins to 1hr on each call. Maximizing the value of your business and being the quarterback is a full time job for many months.

Confidentiality: Understanding when and how to show buyers information about your business.

Experience. We've bought, run and sold a business before. We know the process and have a database of people already looking to buy a business.

Business brokers bring a tremendous amount of value to a deal for all parties. A good broker will save you thousands of dollars, expedite the sale process, reduce your headaches and stress levels and the amount of time you spend screening potential buyers.

Ready to Talk?

DO YOU HAVE A BUSINESS IDEA WE CAN HELP WITH?