The value of a business is based on the theory of substitution. Suppose an interested party has "X" number of dollars at his disposal. He could use that money to buy a business, invest in publically traded stocks, stuff the money under his mattress, or do any number of things with it. Or he could do nothing at all. As a potential investment, how does buying your business compare to all the buyer's other options?
If you're considering divesting in the next five years, getting an opinion of value or valuation is a good starting point. The valuation will compare your business to others in the same industry and size of company that are for sale or that have sold in the past. Ask your broker for a "SWOT" analysis to learn the strengths, weaknesses, opportunities, and threats that make your positioning unique. The good news is that you can take time to address needed changes and insufficiencies to make your business stronger and when the time is right to sell.
A valuation is a small investment that can reveal how to "stage" your business for sale. Contact Thrive Acquisition today to request a valuation for your business.
©Copyright Kathy DeVries, Thrive Acquisition 2020
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