Every business owner should have an idea of how much their business is worth – especially if they’re contemplating selling up at some stage. You can look at comparable listings in newspapers and online, and there are plenty of rough calculations based on turnover and assets but if you need to pin down a more accurate valuation, who should you ask?
Accountants and business advisors
If you already have a trusted accountant who has been handling your business finance for a period of time, chances are they’ll have a good insight into its value. If you don’t retain an accountant, however, you’ll need to ask colleagues for recommendations.
In the same way, an experienced business advisor may be able to offer a steer on value. However, their skills might be best utilised in helping you to maximise the value of your business before you sell.
Some estate agents handle business sales, especially if they involve the sale of property. Make sure to quiz them about their track record in business sales and check out their current listings to see what kind of exposure they’re getting.
Obviously, as the agent will only make money when they sell a business, they will have a vested interest in getting your business on their books. Try not to be drawn in by an inflated initial valuation.
Business transfer agents – or brokers – make their living selling businesses and should have the experience, knowledge, and skills to be able to help with your valuation.
Brokers follow a variety of business models: some charge for valuations and others take all their payment upon completion of the sale. If you commission them on a no-sale-no-fee basis, you’ll face the same concerns as with an estate agent. Paying up front may be the best way of getting an accurate valuation.
Online business valuations
There are a number of online business valuation tools, including Bizdaq’s own valuation calculator. Obviously, the accuracy of the valuation will vary according to the quality of the information entered but a really sophisticated tool will use algorithms that factor in real data from your business sector to help fine-tune the price.