The worth of your business depends on profits, sales, and even other traditional evaluation methods. The surprisingly important factor, however, is how you choose to sell it. We have actually seen examples in our modern acquisition practice where business owners have received less than 50% of the value they would have received had they elected the sale using a professionally managed, competitive bidding process. Normally, the best way to achieve the most value in the sale of your business is to get several strategic buyers all competing in a soft auction process. That is the holy grill of business valuation in Minnesota.
However, there are two basic truths about Business Valuation In Minnesota that make the entire valuation process and the entire selling process a lot simpler, and a lot hopefully less nerve-racking. The first truth implies that the purpose of the valuation is to determine a PRICE RANGE -; not a price or a specific number. What you need to do is start up with a price range that your business should fall in and start negotiating with buyers at the far end of that price range.
Business valuation is not like a math test that you probably took in school where there’s one exact answer which if you don’t get perfectly correct your professor is going to mark you down. You are simply looking for a price range that you can work with and you start out with the top of the range to advertise your business for sale, you go out and find buyers, you show them your business and you let them determine whether the business is worth the quoted price and they will either agree with you and pay your price or they’ll make a counter-offer -; and this is where negotiations process begins.
The second fundamental truth about business valuation in Minnesota is that a buyer is only going to buy your business for one reason; they want to enjoy the benefits, profits and the income that the business will generate in the future. All these benefits in one way or another are derived from your company’s earnings. So the earnings of your company should be the basis of your business valuation in Minnesota. So whatever price you put on your business, you are going to justify that price to the buyer with the earnings.