For business owners in Charleston, SC, their investment of time, money and effort in growing a business is often very hard to evaluate when it comes to a sale price. Just as in real estate, it is very common for the owner to either overvalue or undervalue the business. Trying to fix a price to sell your business is one of the most challenging aspects of the pre-sale process.
Working with an experienced business broker can help to correctly value your business at a fair price for the market. He or she will also be instrumental in networking with potential buyers as well as vetting all buyers and ensuring confidentiality agreements are signed before sharing information about the business.
The Emotional Connection
As a seller, you have an emotional connection to your business as well as the financial investment in building the company. Often, buyers assume that the amount they have put into the business, including considerations for their time and innovation, will be compensated in the selling price.
This emotional connection when you try to sell your business leads to overvaluing the business. A broker will complete a more objective business valuation using one of several methods to develop a more objective price. While this may not be the final asking price, it is a very reasonable place to start.
The overall economic conditions are always a factor when you want to sell your business. In addition to the general economy, there are also trends in specific industries that are relevant to the ability to sell any Charleston, SC, business.
When the industry itself is trending up, it is much easier to ask and obtain a higher than average sale price on a business than when the industry may be in a slump. The broker can work with you to understand how all of these factors need to be considered when selecting a fair selling price.