How do I Value my Small Business?
Posted by Nick Niesen on October 28th, 2010
The problem with selling any small business ($500,000 and below) is how can a realistic value be put on the business. If a business is valued too high no one will be interested or worse value it too low prospective buyers will think there is something irregular. Also where it is listed for sale is important, EBay is a tremendous medium for certain things however fraud is common place.
Unfortunately there is no fixed system when it comes to valuing any private business, the IRS, Courts of Law and the Inland Revenue all use there own systems. There are also many wonderful mathematical formulas that can be used; however there is no fixed system. To be honest the whole system is complicated with no fixed rule apart from one. What price is a person is happy to sell a business for and what is the buyer happy to pay?
If you are either buying or selling a small business do not be afraid of negotiation, it is a natural process within business. There are many good negotiation techniques; Maitland Kalton of Kaltons Solicitors London is considered an expert in this field.
The following list is a simple aid to assist people who are interested in finding a value of a business, either for the sale or purchase.
1.Does the business have employees either full time or part time? Prospective buyers should be aware that any business in the UK which employs 5 or more people has specific duties in regards to Health & Safety.
These are just a few factors that have to be considered, as you can see there is much more to take into account than how much revenue is generated by the business. I hope this short article has been of some assistance to any potential buyer or seller of any small business.
About the author - Peter Arkwright recently retired from the military, he is now the Managing Director of www.bizseller4u.com
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About the AuthorNick Niesen
Joined: April 29th, 2015
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