How much could I get for my business if I listed it for sale today?
If you’re thinking about selling your business, one of your first questions is probably one of money. What is the value of your business? A business valuation helps you determine that. In simple terms, a business valuation is a standardized set of processes and procedures used to arrive at a reasonable estimate of your business’ worth.
Why Do You Need a Business Valuation?The old cliche that “a business is worth whatever a buyer is willing to pay and a seller is willing to take” may be true in essence, but it’s not an effective way to arrive at a business valuation. Nor is simply coming up with a value in your own mind; most small- and medium-sized business owners tend to overestimate the worth of your business when estimating its value. And that’s understandable, given all of the emotions and time that you’ve spent building, nurturing and growing the business.
The Downsides of a DIY Business ValuationAttempting to sell your business without a proper business valuation may have seriously negative impacts on your overall sales process. After all, if you wildly overvalue your business and list it for sale, you’re essentially advertising your inexperience in the sales process to potential buyers, who may attempt to use your lack of knowledge to their financial benefit--or who may roll their eyes at your inflated price, vowing not to waste their time with a future second look.
Business Valuations are Key to Sales SuccessIf you’re serious about selling your business and pursuing whatever other goals the future holds for you, a business valuation will be imperative to your success. Only a business valuation will give you a realistic, data-based number that considers all tangible and intangible elements of your business. Contact us today to schedule your complementary business valuation.
A Business Valuation Model Informed by Personal Experience
Because we’ve created, bought and sold our own businesses, Sigma’s professionals have personal knowledge of the blood, sweat and tears that go into building a successful business. We’ve also helped hundreds of business owners successfully sell their businesses. This combination of experiences led to the development of our valuation model—one which helps you to achieve top dollar while increasing the chances of a quick sale.
Sigma’s Valuation Model: Transparent and Proven
Sigma prides ourselves on a valuation model that is proven to provide stellar results to sellers while providing complete transparency during every step of the process.
- Clear methodology: Many business brokers have a mystery formula they use to perform a valuation, presenting you with a final number but providing very little insight into how they came up with it. At Sigma, we take the time to explain how we came to our valuation, addressing any questions or concerns before the sales process starts.
- Comparable statistics: Your business valuation benefits because our valuations are based on real numbers, not best guesses. Thanks to our extensive business sales experience, we’re able to access up-to-date, comparable statistics from our own sales and transactions and those from other brokers across the U.S.
- Accuracy of value: When we give you a valuation, you can count on it being on target. In fact, our valuations are typically accurate within 5% of the business’ final selling price, meaning that the business routinely receives offers and sells for an amount that is within 96% or more of our valuation.
- Advice to increase value: Sigma’s brokers have collectively sold more than 500 businesses and have seen what qualities and characteristics have a big impact on increasing or decreasing value. We’ll provide you with actionable steps that will make your business more attractive to potential buyers while increasing its value.
Interested in getting a realistic business valuation for your Dallas, Texas, Fort Worth, Texas or Oklahoma based business? Fill out our Business Valuation form to schedule a free consultation and business valuation.
Preparing for Your Sigma Business Evaluation
Ready to meet with one of Sigma’s professionals to gain a valuation of your business? Though your paperwork isn’t the only thing we’re interested in, it’s still necessary. Here’s a quick list of items you’ll need to bring with you:
- Federal tax returns for the last 3 years
- Interim Profit and Loss Statement (P&L), including balance sheet
- Profit and Loss Statements (P&L) for the last 3 years, including balance sheets
- Average value of inventory of saleable product on hand at any time of year
- Equipment list
- Lease information
- Copy of any real estate appraisal that is available; if the real estate may be included in the sale