{"id":544382,"date":"2019-05-17T20:59:48","date_gmt":"2019-05-18T00:59:48","guid":{"rendered":"https:\/\/mabusinessadvisors.com\/los-angeles\/blog\/2019\/05\/17\/obtaining-a-fair-market-value-when-selling-your-business\/"},"modified":"2019-05-17T20:59:48","modified_gmt":"2019-05-18T00:59:48","slug":"obtaining-a-fair-market-value-when-selling-your-business","status":"publish","type":"post","link":"https:\/\/mabusinessadvisors.com\/los-angeles\/blog\/2019\/05\/17\/obtaining-a-fair-market-value-when-selling-your-business\/","title":{"rendered":"Obtaining a Fair Market Value When Selling Your Business"},"content":{"rendered":"
\n
\n

\"\"<\/p>\n

Divestopedia<\/a> published a rather insightful article, \u201cLetting the Market Bridge the Valuation Gap.\u201d\u00a0 In this October 2018 article, Dave Kauppi dives in and explores how fair market value can be used as a way for business owners to \u201cbridge the gap between the valuation they feel they deserve and that which they\u2019re likely to receive.\u201d\u00a0 This, of course, increases the chances of a deal actually taking place.\u00a0 Let\u2019s turn our attention to some of the key points in Kauppi\u2019s informative article.<\/p>\n

Understanding the Reality of Selling a Business<\/strong><\/p>\n

One key point is that only a low percentage of businesses actually sell on their first attempt.\u00a0 The article points out that a mere 10% of businesses that are for sale are actually sold three years later; this is a simply brutal fact.\u00a0 Few facts, if any, help underscore the value of working with a Business Broker \/ M&A Advisor more than this point.\u00a0 Selling a business can be difficult under even the best of circumstances.\u00a0 The process is complex, and most sellers have never actually sold a business before.<\/p>\n

Divestopedia believes that it is critical for business owners to have realistic expectations regarding valuation.\u00a0 As the article points out, the market doesn\u2019t care \u201chow much money you need for retirement,\u201d or how much you\u2019ve invested.<\/p>\n

Four Points to Consider<\/strong><\/p>\n

According to the article, it is important that business owners understand that a few business characteristics will ultimately drive the sale.\u00a0 There are four key factors to consider: contractually recurring revenue, durable competitive advantage, growth rate and customer concentration.<\/p>\n

There is a lot packed into these four points, but here are a couple of big takeaways.\u00a0 In terms of customer growth, if a large percentage of your business is derived from a single customer, then that is going to be seen as a problem.\u00a0 As Divestopedia points out, if your company is dependent and partially dependent on a single customer, then you can expect a lot of pressure for you, as the business owner, to stick around a lot longer to ensure that this key customer isn\u2019t lost.\u00a0 If intellectual property, such as software, is involved, then things can get even more complex.\u00a0 In the end, determining value in technology-based companies can be more challenging.<\/p>\n

In the end, working with a seasoned Business Broker \/ M&A Advisor, one that understands valuation and how best to get there, is a must.\u00a0 You want to receive the best possible price for your business.\u00a0 An experienced Business Broker \/ M&A Advisor will help you understand how to navigate the complex process of determining a price.\u00a0 However, and most importantly, aBusiness Broker \/ M&A Advisor will help you achieve a fair market value, so that your business doesn\u2019t remain unsold for years.<\/p>\n

Copyright: Business Brokerage Press, Inc.<\/a><\/p>\n

zeatrue\/BigStock.com<\/a><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Divestopedia published a rather insightful article, \u201cLetting the Market Bridge the Valuation Gap.\u201d\u00a0 In this October 2018 article, Dave Kauppi dives in and explores how fair market value can be used as a way for business owners to \u201cbridge the gap between the valuation they feel they deserve and that which they\u2019re likely to receive.\u201d\u00a0 […]<\/p>\n","protected":false},"author":3,"featured_media":544383,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[9,96],"tags":[],"class_list":["post-544382","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-seller-articles","category-selling-a-business","entry"],"acf":[],"yoast_head":"\nObtaining a Fair Market Value When Selling Your Business - 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