How is the value of my business determined?
Several factors are involved in determining valuation. In a preliminary discussion with your intermediary, it is helpful to understand your business trends the past few years and its prospects for the future – has your business seen consistent top-line growth, has it been affected by a tough economy, what assets will convey with the sale, is your company growing, etc.
Ultimately, the value of the business is determined by what the market will pay. The market treats business types and industries differently - a blue collar construction company will be valued differently than an online wholesale distributor. Additionally, a financial buyer will ascertain one value, while a strategic buyer another. For this reason, we suggest a valuation range in our engagement, and in many cases don’t offer an asking price to the market so as to not leave money on the table for the right strategic buyer.