This is generally the first thing on the minds of today’s business seller. What is my business worth is an important consideration for today’s business owners. Keeping a scorecard of business valuation is important and it is also important to know how the process works. Why is one business worth more than another seemingly similar business? These kinds of questions are why it is important for today’s business sellers to stay in touch with an Austin business broker or mergers and acquisitions firm. They can give you that business valuation or at least, opinion of value, so that you stay on the right track and don’t expect something much more when it comes time to sell. When it comes time to sell, if you have a solid business valuation, then there will be no surprises in what your company may be worth.
One of the first questions to ask is, “Would I want to buy this business?” Why is this important? Business sellers must always put themselves in the shoes of the buyers. Does the business make money? If not, you may find there is a very limited market for your business or no market at all. There are few turnaround artists at this level of the market. That skill set is just generally not available. For regular buyers, if they have to write a check to the business every week, rather than taking one out, this is almost always the most important factor. Is the cash flow repeatable? Did you just have a monster year? A new buyer will not pay top dollar unless they believe they can produce the same amount, or more, of cash flow following the transition to the new buyer. A new buyer wants to make sure they are not paying for thin air. They would like repeatable cash flow. When asking what is my business worth, you should contact us for a comprehensive review. We will give you an honest view of what you may be able to get for your business and we will help drive the demand to get it there.
This should not be guess work for most business brokers and mergers and acquisition specialists. They know what multiples of earnings, EBITDA, or seller’s discretionary cash flow that most business should get. They can also use discounted cash flow methodologies to see what future earnings can be valued at now. They will also know what can or cannot be added back to seller’s discretionary earnings or EBITDA to get the proper adjusted EBITDA level. If you want to know what is my business worth, it is worth to to speak with a local business broker.
If you would like to know more, please contact us below and we will be happy to help.