Valuing Your Business for Sale: The High Value of Business Sale Professionals

When it comes to selling your business, valuation is one of the first steps you’ll take to prepare the business for sale. There are a variety of circumstances that impact valuation, so it’s important to consider assembling a team of advisors. The surest way to arrive at a valuation for your business is to seek the guidance from professionals experienced in business assessments, valuations, and sales.

When and Where to Seek Guidance

Seek guidance from a business appraiser or valuation expert if your business owns intellectual property or involves proprietary processes, a valuable brand, or other assets that are unique and therefore difficult to value and price.

Seek guidance from business consultants if your selling price could be significantly higher following major business improvements that are beyond the expertise of you and your management team.

Seek guidance from a business broker if you need help placing a value and price on your business, maintaining confidentiality about your sale, finding and dealing with prospective buyers, and taking on the demands of selling your business – while you keep running it efficiently.

Seek guidance from a merger and acquisition (M&A) specialist or from an attorney with M&A expertise if your business has annual sales over $5 million or annual SDE over $1 million, as it is likely to attract another business as its buyer, and the sale will be complex.

Seek guidance from a local Small Business Development Center (SBDC) for help with business planning, financial management, and much more. America’s SBDC is a nationwide network, funded in part through the U.S. Congress and Small Business Administration, that offers a wide range of free and low-cost services to small businesses.

Choosing a Business Broker or M&A Advisor

Business brokers and M&A advisors offer in-depth insights on valuation, marketing, prospecting, negotiations, and other fundamental sale elements. Most have extensive prior business experience that allows them to understand the financial, operational, and legal aspects of a business.

From sale preparation through the sale process, their role is to streamline the process, focusing on the deal while the owner focuses on maintaining business operations and strengths.

Most brokers and M&A advisors charge a percentage of the sale as their fee. In return, they provide a number of benefits:

• Experience in the business sale arena and process.
• Knowledge of comparable business sale values.
• Ability to professionally present the business and attract prospective buyers through extended networks and listings on heavily trafficked sites.
• Access to a database of prospective qualified buyers.
• Ability to establish confidential contact with targeted prospective buyers.
• Experience assisting with business preparation, valuation, and sale materials, although sometimes at an additional fee.
• Guidance and expertise through the buyer negotiations, due diligence, financing, closing documents, and the final business transition from seller to buyer.
• Experience in business sales and familiarity with most challenges that can arise.

Brokers and M&A advisors are especially valuable for business owners who are uncertain about valuation, who are unclear about how or where to find prospective buyers, who lack time to run the business while also planning for and negotiating a sale, and who have little expertise in marketing, presenting, and negotiation.

When it comes to determining the value of a business, consider relying on professionals who are experienced in business assessments, valuations, and sales. Consult business appraisers and valuation experts to help with valuing intellectual property and business consultants when planning value-enhancing business improvements. Business brokers are adept at guiding sellers through the process of selling a business and handle he demands of the of a business sale, allowing you to keep running the business efficiently. Merger and acquisition (M&A) specialists will be helpful if your business is likely to attract another business as its buyer, if its sale value and future potential is high, and if the sale will be complex. When seeking a qualified broker, check out the BizQuest Broker Directory, which includes thousands of professionals who can assist with business sales.