The Myth: A business is worth only what someone will pay for it
The first question raised by business owners looking to sell their business usually revolves around valuation – that is “What is my business worth?”
And the most common answer they get is that a business is only worth what someone is willing to pay for it.
Whatever the underlying assets, strengths, earnings or prospects of the business, there is apparently a financial formulae that can estimate value. In reality, it’s not till the business goes to market that its owners know what buyers will be willing to pay.
The business is not worth only what someone is willing to pay for it – it’s worth what you can get someone to pay for it.
However attractive your business is to buyers you will not get top whack unless you actively work towards getting it! And there are specific things your broker can do to attract the buyers, who’ll value your business not on the earning or the assets, but on the potential the buyer/s can develop.
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Article by Clinton Lee – Exit UK Business Brokers