There are many different factors that go into determining the value of anything for sale. This is why a business valuation from a professional business broker is such an important step.
When you are s/aelling a Minnesota business, there are both tangible items such as equipment, office materials, buildings, property and even inventory as well as those that are intangible. A good example of intangible items that would impact the selling price or the price offered for a business would include the customer base, existing favorable contracts with vendor and suppliers and even an agreement the existing staff and management would stay on under new ownership during a transition period or for longer.
It is very difficult for a business owner to develop an accurate price for her or his business. There is an emotional connection with the company plus all the hours spent in building up the business. While this was a cost to the business owner, it is a direct influence on the current value.
What the Valuation Provides
A business valuation allows the experienced broker to come in and provide an objective value for the company based on the market, assets, intangibles, tangibles and other factors.
Without this type of assessment and evaluation, it can be very difficult to determine a fair market value for the sale. It can also be very helpful in determining if this is the right time to sell. In some cases, after the business valuation, the owner may decide to make improvements or formalize contracts and agreements with customers and vendors, helping to improve the ability to sell the company.
In Minnesota, there are some highly qualified and experienced business brokers offer no-cost valuations for businesses in the state. This is an ideal opportunity to learn more about your business and to discuss factors that may influence your decision to sell.