{"id":1659,"date":"2018-07-25T14:58:53","date_gmt":"2018-07-25T20:58:53","guid":{"rendered":"https:\/\/www.sunbeltnetwork.com\/lafayette-la\/?p=1659"},"modified":"2025-02-03T17:18:14","modified_gmt":"2025-02-03T17:18:14","slug":"why-you-shouldnt-put-a-value-on-your-own-business","status":"publish","type":"post","link":"https:\/\/www.sunbeltnetwork.com\/lafayette-la\/why-you-shouldnt-put-a-value-on-your-own-business\/","title":{"rendered":"Why You Shouldn’t Put a Value On Your Own Business"},"content":{"rendered":"

It sounds counter intuitive right? No one knows your business and what it is worth more than you do. Why would you turn over that responsibility to anyone else? Well, there are actually a number of really sound reasons. If you are ready to sell your business, no matter why, you will need a team of professionals to not only help determine its value but help get it ready to sell.<\/p>\n

But why can\u2019t you just tell the buyer what your business is worth? Because you are going to have to prove it, and that takes a lot more work than you can do yourself, and it needs to be done by someone objective that the buyer will trust.<\/p>\n

Here are a few simple reasons why you should not put a value on your own business.<\/p>\n

You\u2019re Biased Because You Built It<\/strong><\/p>\n

Your business may have a lot of perceived value to you. Maybe you built or inherited it, so it has some value to you that really can\u2019t be put on the books. Or maybe it can. From earning potential to the value of your customer base, there might be a way to include what you think your business is worth in the actual valuation. It\u2019s just that you can\u2019t be the one to decide that.<\/p>\n

Business Valuation is Actually a Process<\/strong><\/p>\n

Determining the value of your business apart from just your assets is not like getting an appraisal on your house or your building. There are several steps you must go through before you even get a value, and even then it can get more complicated.<\/p>\n

\u2022 Fix Your Data: for the most part, small business owners set their books to give them the biggest tax advantage, but you will need to recast Income statements and balance sheets to show true earnings before you can value your business properly.
\n\u2022 Choose a valuation method<\/a>: If you are an asset heavy business, the asset approach might work for you, but the income approach and market approach might also be appropriate. Most experts take a look at all of these, and weight them with different percentages to come up with an overall evaluation.
\n\u2022 Set the Value You Will Market Your Business For: Once you have gone through the process you need to set the value you will market your business for.<\/p>\n

Because this is a process, and not every value will be the same, having all of your data together will allow your buyer to do their due diligence and will mean your business will sell for what it is worth.<\/p>\n

Your Business Might Be Worth More Than You Think<\/strong><\/p>\n

There are several reasons you might want to sell your business, and that helps determine the value as well. One is that you are selling the business outright as an operating business. This means the new owner will take over and continue operating the business the way it has been running. This means you are looking for full market value from a qualified buyer who is not only financially sound but also able to run the business as well.<\/p>\n

The second is an investment value. In this case you have a unique product that a larger business might be invested in. In this case, they will probably buy your business out and develop and market the product under their brand. In this case, you are looking for investment value, the worth of your company and assets plus the future potential value of the product you have invented. This means the value will be more than the simple market value, and often the company buying you out will offer you some of their stock as part of the price. This can save you a lot on tax liability of the sale.<\/p>\n

The final value is when you are in financial trouble and in a hurry to sell. We all hope this never happens, but in this case the business owner is looking to liquidate the business quickly and may not have time to assign a proper value to it. In this case, auction values or asset value may be all the business owner gets.<\/p>\n

You should not put a value on your own business regardless of how much you think you know what it is worth and what you are doing. You will need a team of objective partners who know what they are doing and how to market and sell a business.<\/p>\n

Ready to sell, but feel overwhelmed and don\u2019t know what steps to take first? We here at Sunbelt Business Brokers<\/a> understand, and we want to help. Contact us today.<\/p>\n

Don Pippin Jr CBI CMSBB
\nCertified Business Intermediary<\/p>\n","protected":false},"excerpt":{"rendered":"

It sounds counter intuitive right? No one knows your business and what it is worth more than you do. Why would you turn over that responsibility to anyone else? Well, there are actually a number of really sound reasons. If you are ready to sell your business, no matter why, you will need a team […]<\/p>\n","protected":false},"author":16,"featured_media":11804,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-1659","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"acf":[],"yoast_head":"\nWhy You Shouldn't Put a Value On Your Own Business - Sunbelt of Lafayette<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.sunbeltnetwork.com\/lafayette-la\/why-you-shouldnt-put-a-value-on-your-own-business\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why You Shouldn't Put a Value On Your Own Business - 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