What is my business worth?

Usually a multiple of reliable profit, and the multiple depends heavily on how much the business depends on you, its size and its industry. A valuation professional can give you a real range.

Should I sell to an employee or family?

It can work well and keep what you built intact. It often needs a longer handover and sometimes financing help. Plan it the same way you would plan any sale.

What do buyers look at first?

Profit, how steady it has been, and how much of it walks out the door with the owner.

← Answers

How do I get my business ready to sell one day?

Make it run without you, make the numbers clean and believable, and spread the revenue so no single customer or person holds it up. Buyers pay for a business that will keep earning after the owner leaves. The same changes that make it sellable usually make it better to own in the meantime.

A business that needs you is worth less

If the customers, the quoting and the know-how all live in your head, a buyer is buying a job they cannot do. A team that runs the work and written ways of doing it are what turn a job into a business someone will pay for.

Clean, believable numbers

Several years of tidy books, personal expenses kept out of the business, and profit you can show. Buyers and lenders discount what they cannot verify, sometimes heavily.

Concentration lowers value

One customer who is a large share of revenue, one key employee everything depends on, one supplier with no alternative. Each is a risk a buyer will price in. Spreading them out over a few years raises what the business is worth.

Start years before, not months

Most of this takes time to show in the numbers. Owners who start preparing three to five years ahead usually have far more options than those who start when they want out.

Get the right advice early

How the sale is structured, how it is taxed and what the business is worth depend on where you are and how the business is set up. An accountant and a lawyer who have done sales before are worth involving early.

Also asked

What is my business worth?: Usually a multiple of reliable profit, and the multiple depends heavily on how much the business depends on you, its size and its industry. A valuation professional can give you a real range.
Should I sell to an employee or family?: It can work well and keep what you built intact. It often needs a longer handover and sometimes financing help. Plan it the same way you would plan any sale.
What do buyers look at first?: Profit, how steady it has been, and how much of it walks out the door with the owner.

Written for your trade

This is the kind of thing Solomon works through with owners using their own numbers. See how it works →