My Business is Worth What?

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California Association of Business Brokers says know the value of your business

California Association of Business Brokers

A business broker's opinion of value gives you a realistic starting point to work from and can give small business owners direction when determining the right time to sell.

The California Association of Business Brokers (CABB- a non profit trade organization) says if a small business owner is looking to sell their business but is waiting for the economy to turn around, use this time to start preparing. One of the most vital steps in this process is to understand what the business is worth.

Ron Hottes, president of CABB and of several Business Team Business Brokerages says that a business broker’s opinion of value can provide small business owners with an objective view of what a business is worth and is an important piece in determining the asking price. “A business broker’s opinion of value gives you a realistic starting point to work from and can give small business owners direction when determining the right time to sell.”

Before thinking about selling a business, CABB says there are some key things to consider:

Take an objective approach: Having a business broker’s opinion of value from a CABB Certified Business Broker automatically gives a business owner the results and creditability they need. Having this neutral party take a comprehensive look at financial records and the current market is the best way to get an honest picture of the worth of the business.

Know what is needed financially: Business owners should have an idea of what they need to make off the sale of the business so they can be as prepared as possible. If a business owner is selling because of retirement, knowing what they can expect to make from the sale is an important component of their exit plan.

This is the starting point: A business broker’s opinion of value is only a starting point in selling a business. If the opinion of value comes back less than what was anticipated, there is time to do things like improve sales and review operation processes to make a business as streamlined and profitable as possible.

“What is important for business owners to know is that a down economy is just one part of the cycle we are in and an upswing will occur,” Hottes stated. “Those small business owners who take the time now to improve and prepare their businesses for sale will be the ones who will see their business sold at the best price possible.” http://www.cabb.org.

The California Association of Business Brokers (CABB) is a professional trade association dedicated to promoting the growth and professionalism of the business brokerage community within California. CABB is the largest organization of business brokerage and merger and acquisition specialists in the state, with more than 450 members. Founded in 1986, CABB was organized to recognize the profession of business broker, to offer advanced educational programs to all members, to create and maintain credentials, help educate the public on the benefits of using licensed business brokers and to establish a code of ethics for all members.

Use of the information from the California Association of Business Brokers is solely for informational purposes. The opinions expressed in this document do not constitute legal or financial advice.

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Kristen Paquet
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