If you simply want a broad & general sense of your business value, then FREE Market Value Snapshot will deliver what you need.
Some websites will offer a “free” valuation – but be beware that:
Many are based upon “for sale” listings or on “sold” comps – and are oftentimes irrelevant and unreliable. There are many elements to properly developing a business valuation, and it is rarely deemed credible by trained and skilled valuation analysts to rely on a database of “listings for sale”. Why? Because people (including those who are uncredible or disreputable) will “list” their business with unrealistic value expectations and result in never being sold. Sellers unrealistically “list” what they hope for.
Many “ONLINE BUSINESS CALCULATORS” will only have you enter the last year of financial data. That’s not only inappropriate it’s incredibly inaccurate. No Buyer will purchase a business or determine its value based on one year, and lenders will never loan the Buyer money for the purchase based on one year.
Determining your business value is the first step to selling your business no matter which option you choose to facilitate the sale:
There is no particular “right size”. However, it tends to make more sense for smaller businesses when the sale would not justify a full broker fee and there are no complex issues to navigate. Generally, this would be a business that would have a sale value under $250,000 (or sold through the Deal Coach).
Basic contact information for you and your business, and the last three years of financial information (gross revenues, net profit/loss, owner’s salary, any paid; interest, business income tax, depreciation, and any amortization ).
You won’t need to send anything. We’ made it USER-FRIENDLY and easy to follow. Just complete the requested information online and we do the rest.
You should receive your report soon after completing the information.
Without knowing specifically what is being compared it would be unfair to speculate. However, you should be aware that many are based upon “for sale” listings or on “sold” comps – and they are predominantly irrelevant and untrustworthy. There are many elements to properly developing a business valuation., and it is rarely deemed credible by trained and skilled valuation analysts to use a database of “listings for sale”. Why? Because people (including uncredible or misleading representatives) will “list” their business with unrealistic and overly inflated value and result in never being sold. If you get a “valuation” based on flawed information (although you may like the value presented) it will not serve you well in getting your business sold. Flawed information produces flawed results. The “sold” comps can also have elements that are misleading and askew. Some online “valuation calculators” only ask for your most recent year of financials, and that is highly inappropriate and incorrect. Why? Because no Buyer will purchase or value a business based on one year of financial information, nor will a lender provide funding to a Buyer based on just one year. Each level or type of our value ranges are based upon industry valuation approaches, methods, and techniques and coupled with what Buyers in the market will pay and what Lenders will loan to Buyers to purchase a business. Our value ranges are more of a “Practical” approach than a philosophical one – this helps you actually see your business rather than try to sell it.
Yes, we have access to market database details. We even utilize the same database and screens most commonly used by lenders who provide funding for buyers to purchase businesses.
Our founder has been performing business valuations for over 35 years and has earned credentials. He has performed valuations for the purposes found on this site, and for legal and litigation purposes as an expert witness. Oftentimes he will perform USPAP valuations, that is, in accordance with Uniform Standards of Professional Appraisal Practices (the Appraisal Foundation).
There are only three industry recognized Approaches (Asset, Income, and Market), and various Methods within each approach. For purposes of providing a FREE Market Value Snapshot or The Deal Coach – Sellable Ranges of Value the approaches and methods are limited (but far more accurate than “listings”, or cocktail discussions of “multiples, or a quick meeting with a “napkin approach”, or a one year online calculator).
The “sellable ranges of value” in our reports are based upon certain industry accepted valuation methods that produce a range of business values that are embraced by buyers and the lenders who are needed to fund the business purchase. Regardless of what value you want or what a buyer is willing to pay, ordinarily it’s a matter of what a lender will fund for the purchase (after the buyer invests capital). After decades of experience in the market of helping people value and buy and sell businesses, we have seen a lot of online “Free Valuations” being offered that oftentimes deliver inflated values and unrealistic expectations to those wanting to sell their business. This is done because it promotes what sellers want to hear and it entices them to “list” their business with a representative who will unlikely be able to deliver the value or they will get the seller “listed” and then try to gradually work the expectations of the seller downward (bait and switch). We believe this is inherently wrong and is a disservice to sellers. The question you must ask yourself is: “Do I want to get an inflated value to make me feel good, or do I want a value that will help me get my business sold?”
Your FREE Market Value Snapshot was developed from very limited information provided by you. It encompasses a broad range of values on the low and high end of what might be reasonably expected given the limited information. When developing the Deal Coach – Sellable Ranges of Value, you complete more detailed information about your business including financial information, various specific attributes of your business, recasting/adjusting of financials occurs, income measures are calculated, and more specific market conditions are imputed for arriving at a conclusion. In short, the Deal Coach – Sellable Ranges of Value are far more likely to align with the practical results of a correctly navigated sale process than that of the FREE Market Value Snapshot. We’re here to help you get your business SOLD so you can realize your goal of selling your business and collect that BIG check at closing! That all begins by having a market aligned range of value (sales price).