Business Valuation Blog | Understanding Buying / Selling a Company

What to Consider When Selling Your Small Business in The Open Market

Posted by Business Valuation Specialists LLC on Apr 24, 2023 7:30:00 AM

Business Sale Appraisal Open Market

After owning and running your company these past years, you have achieved many of the goals you once had to create a successful enterprise. The day has now arrived when you decide it’s time to move on to retire or create another opportunity with a different business. If you don’t have a desire or the ability to sell to your employees or hand the reins over to family members, the option to market your business in the public arena is a viable one.

The upside to an open market sale is that you can potentially realize top dollar from a competitor or new entrant and walk away from the deal with 100% of the proceeds in your pocket. However, there are a few roadblocks to consider that may get in the way of a smooth transaction. You need to manage these carefully while not losing sight of the overall end game of a successful sale. Here are a few things to consider:

Should You Engage with a Business Broker?

No one knows more about your company’s history and future growth potential than you do, however, selling your company requires a lot of time to prepare and market on your own. Selling companies is a business that requires certain experience and expertise you may not have, and the additional time to handle this without assistance can be overwhelming.

Consider researching business brokers who are familiar with your industry and company model, while gathering the internal data they will need to understand how best to sell your business. If you find someone you believe can greatly increase the odds of a successful sale, you can formally engage them to represent you in the open market. Having a reputable business broker working for you can give you a layer of independence and added credibility while potentially reducing the time it takes to realize a sale.

Obtain a Formal Company Appraisal

Another level of unbiased independence can be gained when you have a business appraisal completed by a certified professional. This step should be completed in the early stages of marketing so you can present the report to potential buyers and your broker if you’ve engaged with one.

In summary, selling your business in the open market is an exciting opportunity that comes with challenges that are best faced with a level of independent support that maximizes the chances of a successful outcome. Consider all the options you have carefully to determine what will work best for you.

Tags: preparing for a business sale, Business Sale Valuation

Selling a Business to a Third Party? Obtain a Business Valuation First

Posted by Business Valuation Specialists LLC on Mar 15, 2021 8:00:00 AM

Business Valuation Essential Before Business Sale


When you're selling a business to a third party, the topic of appraisals may arise. But why is it important when you're selling your company, and what difference will it make at the end of the day? A formal valuation of your company is one of the key components that drive the transaction. Here's why:

Why Business Valuation is Important When Selling a Business to a Third Party

When you're planning to sell a business to someone you don't know, you want to make sure everything is done fairly and equitably. Completing an independent, certified, third party appraisal early on is the first step to ensuring this happens. By having an appraisal performed, you can see where your business needs improvement, and learn where it is already strong so that you don't have to put further effort into areas that are already in great shape. Once you've made changes and improvements in those areas that required them, your business should increase in value, allowing you to realize the benefit from your actions and detail these updates to potential buyers.

If you're like many business owners, you know that your company should be worth more than the assets on the balance sheet, but may not know exactly how much more. By having a certified business appraisal in hand, you have a better idea of what that figure should be, and can consider offers that are reasonable while dismissing those which are not. You can also decide if you want to ask a price that is in line with similar businesses in your market or if you feel you have a unique position that should be accounted for, ask something higher for that consideration.

Having a formal business valuation helps you at the negotiating table. Because a certified appraisal is based on accepted standardized methodologies, it represents best appraisal practices and procedures, and can also be useful in legal, insurance, and financial circles. If you want the potential buyer to come up in price, providing them with a copy of the appraisal report may make them aware of facts and circumstances about your business they may have previously been unaware of. This gives them a legitimate supportable reason to either change their initial offer or meet a counteroffer you've proposed to them during negotiations.

Business appraisals are vital to your success when selling a business to a third party. If you're getting ready to sell your business and haven't contacted a business valuation firm, please feel free to contact us today. Our qualified business appraisal specialists are ready to help you get the maximum benefit from your business sale.

Tags: business valuations, business appraisal, Business Sale Valuation

A Business Owner's Guide to Selling a Business in 2019

Posted by Business Valuation Specialists LLC on Mar 8, 2019 8:00:00 AM


If you're considering selling a business in 2019, have you considered all the factors that come into play in maximizing your profit? If you've put years of equity and your own personal effort into building a company, isn't it worth putting a little more effort in this year to make sure you're getting everything it's worth? This guide will help you make the most of your business sale by showing you how to go about that process to ensure you're getting everything you can from your business.

A Business Owner's Guide to Selling a Business in 2019

  • Consider why you're selling. Are you selling because you're in a desperate situation with your company? If you are, it may not be the best time to sell to maximize your value. Consider alternatives such as bringing in fresh talent to turn the business around or provide additional support while you work through a health crisis or family issues. This may make it easier to keep your business and make it profitable again.
  • Start the sale process by getting your paperwork in order. Is your bookkeeping up to date and accurate? Are your assets accurately portrayed in terms of value in your books? Do you need to update other documentation, such as who is in charge of which portions of your business or your business processes in your manual? Make sure that this paperwork is up to date and ready for any potential buyers.
  • Deal with any obvious problem areas. If you have a large portion of bad debts, consider calling them in, writing them off or using an outside agency to collect on them. Do you have old equipment lying around that needs to go? Get it sold first. Only when you've dealt with these issues is it time to consider talking to a professional.
  • Have a business valuation performed to find hidden value potential. When you work with a business valuation specialist, they prepare a report that includes areas where your company is strong and where it is weak. Make sure you work with a certified valuation specialist to ensure the accuracy of the information.
  • Improve the areas recommended on the report. Once you've received the report and have clarified any areas where it may be inaccurate, start acting on the areas where your company is weak to improve them and solidify the areas where it is strong to retain the value they provide to your bottom line.
  • Get a secondary business valuation report prepared. Once the improvements are made, have a secondary report developed so that you can make sure you've maximized your company's potential value. It's only at this point that you should ask for recommendations for a reliable, reputable broker and interview the best to find the right fit. 

By taking the time to go through these steps, you can ensure that selling a business in 2019 is as painless a process as possible while maximizing your company's potential for profitability in the sale. Don't assume that simply listing your company for sale with no further preparation is in your best interests, but use the advice of a certified business valuation specialist to make improvements that will have a real impact on your final sale price.

Tags: Business Sale Valuation