Brokers Professional Opinion of Value

It is important to distinguish a formal business valuation from business pricing, known as a “broker’s opinion of value” (BOV).

A BOV is a broker’s opinion of what a business may sell for, based upon his/her personal analysis, industry expertise, knowledge of local markets and lending, and comparable past sales. While it is not a formal business valuation, an experienced business broker should be able to deliver a BOV and articulate a realistic Most Probable Sales Price (MPSP) range.

The BOV provides a business seller with expectations on what the business may sell for, given the intended pool of potential buyers, at that given time. For some businesses, the BOV is then used to set and communicate an asking price. For large businesses, an asking price may not be advertised.

As part of the BOV, the broker should also provide insights on how different deal structuring scenarios could impact the targeted sales price, and the associated tax considerations. Ideally, the broker will function as part of your overall broker team who will collectively consider the implications of different deal structures.

Want to know more? Get in touch with your local Sunbelt office to speak with an experienced business intermediary.