Setting a realistic asking price is probably one of the most important steps in the selling process. Naturally, you want to get the best possible price for your business, but you should understand that the price is determined by the current marketplace.
The price should be set high enough to allow you room to negotiate, but not so high as to frighten off prospective purchasers. However, at all costs, you want to avoid the risk of under selling your business.
Businesses are not simple entities like homes and valuing a business is much more complicated than you can imagine. There are many factors that need to be considered. For example, some factors which may shift the value of your business include:
- synergies with their own business;
- wanting to build on your client base;
- wanting to acquire new technology;
- reliable and attractive profit figures;
- experienced personnel;
- good systems and documentation requiring little vendor involvement;
- reliable suppliers and customers; and
- market share and position.
A well trained and experienced business broker can help you to establish a fair market value and determine a fair price and help your business get sold.