Are you asking yourself, “What will my business sell for?”
I often talk to business owners who estimate the “value” of their business based on a multiple or a rule of thumb (ie. 3x Adjusted EBITA or 1.8x Revenue). This is dangerous when planning for the sale of your business because this methodology can easily mis-represent what your business will sell for. There are a variety of factors that determine what buyers will be willing to pay – many of which are not considered when using multiples or rules of thumb. For example, two businesses in the same industry and market segment that produce identical financial results will sell for drastically different amounts if one enterprise has significant revenue concentration with one or two customers and the other has revenue spread out over a larger number of customers.
A market-based analysis of your specific liquidity event will provide the fact-based insight that you need and shouldn’t cost you a lot. Once armed with the facts, you can plan for a successful transition. Klassen Ingalls will provide you with a market-based analysis giving you a true understanding of what your business will sell for in today’s market and why. Contact Us when you want to start your analysis.