There are many reasons that someone might choose to sell their small business. They might be ready to move onto other business opportunities or read to retire, they might be struggling to make it work or they might have already made it into a successful business that they are ready to move on. Whatever the reason is, a small business owner may struggle with the details of the sale and on choosing an appropriate valuation model of their company that is fair for both parties. Many small business owners wonder about calculating my business worth. What types of things go into the calculation? Does it matter if you are leaving the new owners with an entire storage room or inventory? Does it matter if the company was successful at one point, but is now losing money? Does it matter where the location
There are many reasons a small business owner may want to sell his or her business. The business may have been wildly successful, spurring an offer that makes selling a no-brainer. Another reason is that a longtime owner may have no heirs or employees who want to take over the business and so a sale is an exit strategy. And then there are situations where a sale is forced, either because of a personal issue or a business one. Whatever the reason you are selling your business, you want to get the best possible price, and to do that, you need to use a small business valuation formula to arrive at a price.
There are essentially three ways to value a business for sale. You can look at recent sales of similar-sized businesses in similar industries. Another approach is simply value all the business’ as