Unlike public listed companies where the market determines the price, Pricing a small business is more of an art than science. Sellers that happen to look at the big picture like the deal structure and pricing, are usually more successful in selling their business. One of the reasons business valuation is such a complicated issue is because there is no standard methodology available to value small businesses for sale. It is important for sellers to recognize that the principal reason buyers purchase is for a Return on Investment (ROI). All buyers are ultimately seeking to profit from their purchase by getting a suitable ROI so it is very critical for a seller to have a successful exit plan thought out from the point of view of the buyer.
Every seller has some value in mind which may or may not be the price that a buyer would be willing to pay. We strongly recommend a valuation done by an independent agency. At Kapso, we have experience in valuing almost any business. The volume of comparable businesses allows us to give the business owner a very good estimate of value.