Every story has an ending, and for many business owners the final chapter can be one of the most challenging. There is no guarantee of a happy ending, however there are some simple steps that give your business the best chance of selling at a fair market price. Finding a buyer gives you the recognition for the hard work you have put into building your business and can also provide funds for your next venture/investment or your retirement.
The first step in the business sale journey is to get a better idea of a fair market price for your business.
Every business owner has their own opinion on the value of their business. As the business owner the value you place on your business may be influenced by:
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The amount you paid for it
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The amount you owe (bank and other loans) on your business
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The profit it generates
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The flexibility it provides
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What other similar businesses have sold for
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Or perhaps what someone has told you it is worth
Unfortunately, whilst the above may be of interest to sellers, the important consideration is what a buyer values and what they will pay.
A buyer typically values business assets, earnings and potential growth.
A business is only worth what a buyer will pay.
The best way to predict what a Fair Market Price might be for your business is through a customised Business Appraisal.
What is a Business Appraisal?
A thorough Business Appraisal considers the following:
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The recent financial performance of the business
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The total current returns to an owner/operator including owner’s wages, superannuation and other benefits
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The assets of the business
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Other factors impacting the past/future performance of the business
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Recent sales of similar businesses in the region
MMJ Business Sales & Acquisitions can provide business owners with a customised Business Appraisal. In most cases all we need from you is:
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Profit & Loss Reports – ideally the last 3 years
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A current Balance Sheet or Asset Register
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A Copy of your Lease (if applicable)
We will follow up with some clarification questions and will visit your business at an appropriate time to ensure we properly understand your business and your reasons for selling.
In most cases, we can provide your customised business appraisal within a week. You will have taken the first step in your business sale journey and have a critical piece of information to help you set the right asking price.