How to Determine the Best Selling Price for Your Business

At NOVUS Business Brokers, we have observed that inexperienced sellers often establish a price (typically on the higher side) before determining the true value of their business.

This can be a critical mistake because the price is the primary factor influencing how long a business remains on the market. Therefore, we prioritise conducting a thorough valuation process before setting an asking price.

There are various methods of business valuation. A traditional "desktop" valuation involves using a mathematical formula based on your company's annual operating profit, which is then multiplied by a specific figure.

This figure considers historical trading, past financial performance, industry sector, previous deals in the sector, and metrics like return on investment over a designated time period.

However, acquiring a company is primarily driven by strategic motives, and often, the final price paid far surpasses any standard industry valuation. Additionally, a company's true value lies in its future potential rather than just its past performance.

When pricing a business for sale, we purposely list your business without a fixed value to encourage negotiation, value assessment, and strategic interest.

Only an acquirer with a clear strategic vision and an understanding of your business's future potential can determine its true worth. It is our responsibility to ensure that the market comprehends the scope and genuine value of each business we represent.

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