That is usually the first question a Business Owner needs answered before they decide to sell their business. Although industry rules of thumb may provide a "ballpark" valuation for your business, the values obtained from this method can be completely misleading due to the many variables that affect the worth of a business. For example, the profits on financial statements of privately-held businesses are usually minimized in order to reduce the income taxes to be paid by the owner. Accordingly, if the financial statements are not restated to show the true profits of the business, a rule-of-thumb business value could be substantially less than actual fair market value. In addition, rules of thumb are difficult to apply for high growth businesses because the financial picture is changing constantly.

Your CBB professional broker will help you determine the price range you could expect should you decide to put the business on the market. Typically, we will review the last 3 to 5 years of business financials and recast them to reflect the true income (discretionary earnings) of the business. We will also conduct an in-depth interview with the owner in order to understand the strengths and weaknesses of the business. This business valuation service is provided at no cost to the business owner. If the Owner requires a formalized business valuation or appraisal, CBB will normally suggest a "Restricted Appraisal" which is less complicated than a full appraisal, and much less costly.

Other considerations in determining the business value will include areas for future growth, competition, regional demand factors, the market value of assets to be sold versus depreciated value, stock versus asset sale, proprietary products or processes, synergistic value to a buyer, favorable lease terms, advantageous supplier relationships, management's desire to exit or stay with the business, concentration of customers, and many other relevant factors.

Upon completion of our business valuation, we will discuss our findings and suggested price range for marketing the business with the owner and/or financial advisor and explain how it was determined.

In addition, CBB has the largest private database of actual business sales in the Houston metropolitan area. As a result, CBB can provide comparable sales data from actual business sales instead of just using theoretical valuation methods.

If you would like to discuss the sale of your business and find out how much your business is worth, give us a call at 713-680-1200 or email us at certified@certifiedbb.com.