The value of your business is highly dependent on the resale value of both tangible and intangible assets. Tangible assets include property, such as an office site or a plant, as well as equipment, furniture, and even company vehicles. Intangible assets include your licenses, contracts, trademarks, etc.
Also don't forget, when determining the value of your business assets make sure to factor in any liabilities that will be passed on to the buyer. Include any debt of your business, as well as any upgrading or repair costs that need to be addressed in order for the business to keep running smoothly.
Once you have determined the value of what your business has, you can begin determining what your business makes. This involves analyzing the business’s realistic revenue projections. It is necessary to objectively analyze your financials in order to determine what a buyer can expect to make as a result of purchasing your business.
Besides analyzing the projected revenue of the business it is important to factor in the costs of running the day-to-day operations of the business.
To get a general idea of the market value of your business you may want to look at the overall industry in which you are operating and the selling price of similar businesses. However, it is important to keep in mind that this may not always offer you an accurate selling price. Small businesses are very unique entities and seldom will you find two that share similarities in terms of product and service offerings, sales volumes, location, customer base, and number of employees. Because of this you should consult a professional business broker who will be able to assess the true value of your business. Although you may be tempted to hire the broker who quote you the highest sale price, be aware that this may mean your business is being overvalued – and may result in a difficulty to sell!
Although you may want to receive as high of a price for your business it is important that you remain realistic in your approach, as buyers will also want to buy your business for the lowest price possible. Besides price there are lots of other considerations in the sale of a business that are important and an qualified business broker will be able to help highlight those and manage it for you. At the end of the day, it is important that you are able to sell your business "on your terms".