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Business Valuation

Pricing A Business

by Patricia Skinner

How To Go About Pricing A Business

If you're buying or selling a business you're quite likely to be worried about the process of pricing a business. After all, whether you're buying or selling, it's vital that you're at least in the ball park as far as this is concerned. The success or failure of the venture, from your point of view, hinges on whether you get this right.

If you're selling, pricing a business right means that you are likely to sell far more quickly than you would if you set the price too high. Also, none of us wants to find out later on that we sold for too little and gave some of our hard-earned profits away. If you get a professional business valuation done in preparation for the sale, you'll be sure of getting it all right first time.

Get A Professional Opinion

Also, there's nothing like an independent valuation to encourage prospective clients. If you can offer them a complete set of information right off the bat, anticipating all their questions, you'll be sure to impress them with your professionalism and make them feel at ease about the business in every way.

If you're buying, all this works the other way. You should ask all the questions you can from the person you're thinking of buying from, and in particular, find out how they would go about pricing a business. But don't leave it all in their hands. If they haven't had a professional valuation done, think about having one done for yourself. It could save you money down the road, and you'll be able to get a good idea of how much you should pay.

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