How to Value Your Small Business for Sale

If you are thinking about listing your small business for sale, you will need to know how to value your small business for sale. Various factors need to be taken into consideration before an accurate assessment of the value of your business can be determined, and there are steps you can take to make sure you do so.

1. Hire a professional. Consider hiring a business appraiser. These professionals have the experience and knowledge of determining small business value, and can be an asset to you and your business pricing needs.

2. Ask your realtor. A real estate agent who is experienced in commercial business sales can help you value your business. He will take into consideration factors such as how much revenue your small business generates, how much equipment is included in the sale, and how much business potential that the business has.

3. Don't price too high. If you value your small business for sale too high, you may turn away potential buyers. You need to be objective when pricing your business and you cannot enter your personal feelings into the equation when you consider selling. If your business is valued too high, you might not generate any interest in the business and it will languish on the market.

4. Don't price too low. If you value your business too low, potential buyers may question why the asking price is so cheap. In addition, pricing your business below market value will put a negative spin on your business offerings, prompting potential buyers to purchase another comparable business at a higher price.