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Before Offering your Business for Sale Ensure that you have Mastered these Value Drivers

Posted on September 10, 2018

The first thing that a business owner wants to know offering their business for sale is what their business is worth. That is of course the million-dollar question and the answer is not simple and depends on a number of factors.

Earnings are probably the single greatest factor but there are many other factors that go in to determining the appropriate value of your business. Is the profitability sustainable? Is there potential for growth? Is there a risk that your profitability is tied to one particular consumer? You may be confident that your business has significant value and a bright future but can you demonstrate that to a buyer?

These other factors are more subjective but are all related to buyer risk and the lower the perceived risk to the buyer, the higher the earnings multiple that a buyer will associate with your business. A recent article is divestopedia outlines  ten value drivers that a business owner needs to master in order to sell their business at the highest price.

“Each driver is a characteristic of a business that either reduces risk associated with owning the business or enhances the prospect that the business will grow significantly in the future. Simply put, the better the performance in these areas, the greater the selling price of your business.”

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