Business Sale: Establish Value Before Negotiating

A buyer asking for your price can create pressure to produce a number immediately. That response is rarely as simple as it sounds. An owner may be thinking about years of effort, recent revenue growth, personal financial plans and the funds needed after the sale.

None of those points, by themselves, establishes what a buyer will pay.

A defensible price starts with evidence about earnings, assets, risks and the terms being offered. It also separates the owner’s expectations from the commercial value of the operation, which gives negotiations a more useful foundation and makes later questions easier to answer.

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