It’s easy, as entrepreneurs, to over-value our businesses in the private-sale market.
That’s because we’ve built them – sweated them out, and stayed with them through thick and thin. When it becomes time to sell, it’s natural to think that ‘now, I can be paid for this time’.
…well, not so fast.
Buyers tend to buy businesses because they value things like cash flow (reliable cash flow), customer lists, market share, and intellectual property, over the general ‘givens’ of sweat equity.
Here’s a handy little tool to help you see your business from the perspective of a potential buyer:
While this is not comprehensive (eg, it does not include intellectual property, patents, customer lists, land, leases, etc), it does give you an insight into the valuation process.
If you’re thinking of selling your business…we can help you take a fresh look at the market, and potential buyers. We can also help you value intangible assets – which might be the real value of your business to a buyer!