So I suggested to a potential seller of a business last week, that he should have a professional, definitive valuation conducted on his business before taking it to market.
The response was astounding as always, but not unique:
“I don’t need your valuation. I need sufficient money to cover the overdraft, the balance owing on the vehicles, all the creditors… “
Good point in that nobody needs my valuation. after all there are lots of free instant tools all over the interwebs. You can tailor many of them to tell you exactly what you need to hear.
Consider this: A real, well considered valuation will tell you the truth. Perhaps the truth will warn you up front that you don’t have a prayer of getting “what you require”, and you would be better off putting effort into the next year or so, in improving the value. Perhaps it will tell you that your business is worth a great deal more than what you require to settle all your debts, in which case you might ride off into the sunset with a pleasant jingle in your pocket.
Yes, it will cost you some money, but then so does a checkup at the dentist, a mammogram, a prostate check and a brazilian wax. A valuation is a lot less unpleasant than any of those, and may put you in a better position to afford some of them. {Disclaimer – my experience in some of those is somewhat limited}.
I will be going into some depth as to what determines the value of a business in our upcoming seminar on 18 July. Have you booked a seat?