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Establishing a realistic business market price for your business is the most critical first step in selling your business. If it’s too low, then you lose money, and if it’s too high, you won’t sell it, and the business is always at risk when it’s on the market.
It’s well known in the industry that almost 90% of businesses that go to market do not sell and the main reason is Business overvaluation which in turn influences Seller expectation. If you are given a value for your business, then you will refuse lesser offers and hold out for what you perceive as market price. The net result is that the gap between the actual market value and your expectation will lead to an unsuccessful sale.
Some Agents are keen to get instructions and upfront fees, so they hire salespeople to come and value the business for you. At best, they have little experience in selling businesses, or at worst they will overvalue to get the upfront fees. Sometimes, even success fees are lowered in favour of upfront fees, making the deal seem more attractive, but beware, you are paying for something without any guarantee of results. Much better to go to a no sale no fee Business Broker who will be far more motivated to be realistic in establishing the market price and in selling your business.
Experienced Buyers will know their market, and if they are first-time Buyers, then accountants are hired to establish a realistic sale price. Some agents use potential as a factor in market price, but this is rarely taken into account. The business will be judged on its present position and history.
"Zach has genuinely been the most efficient and helpful person that I have come across when making enquiries into selling my business. His advice was honest and clear, and will enable me to improve my business to make it more marketable when I come to sell. Our meeting was invaluable and I cannot praise his attitude and advice highly enough. Many thanks, Zach!"
Karen Sayer, a business owner from Birmingham, wanted to understand the value of her company and how she could achieve a better sale price.
"Zach, I've written a google review - one of the things I hadn't mentioned previously is how fairly you priced this business - I've seen asking prices for similar businesses at 7 times EBTIDA which makes it difficult to negotiate as they've set their clients' expectations way too high.
Thanks for all the information - this is by far the best buyers pack I've seen put together and answers a lot of my questions"