One of the most important steps in selling a business is pricing it correctly. If you take it to market asking too much, you alienate your best prospects. Price it too low and you risk leaving money on the table.
Getting a valuation of your business is the process of determining the economic value of a business changing hands between a willing buyer and a willing seller.
At Evolution Advisors, we have relationships with business valuation firms and will advise you on the different types of valuation services available and associated fees. We work with you during the valuation process to help determine the information needed for an accurate appraisal. Certified and accredited professionals provide all Business valuations.
Fundamentally, a buyer purchases a business for income or cash flow. Cash flow can be expressed in many ways, typically either as Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) or Seller’s Discretionary Earnings (SDE). In small business transactions, we start with SDE or EBITDA, as this is the most common basis for establishing a price to take your business to market.