News & Resources

Getting the best price for your business

Mar 19, 2011 Karen Umpierre

Getting the best price for your business
The economy has been tough on many companies, and even more so for owners looking to sell their small businesses.
 Getting a fair price from a buyer requires an accurate business valuation, and even that doesn't guarantee an owner will get a fair price. But there are some ways sellers can tip the odds in their favor. Buyers typically take future projected profits into account when trying to convince finance partners that a company is a good investment, writes John Warrillow for Inc. magazine. However, they will base the price they offer a business seller on that company's historical earnings. Before shopping the company, make sure the first part of the fiscal year exceeds the business plan, Warrillow advises. Show how the business expects to bring in solid sales through the end of the year and into the next. Have current customers agree to long-term contracts and try to consistently hit monthly goals while courting buyers. Determining a business' value is difficult, Jeff Jones writes for SCORE, and professional appraisers or valuation software can help entrepreneurs accurately calculate their companies' worth.