Getting the Most from Your Business Valuation

by | Jul 7, 2015 | Real Estate

How accurate is the business valuation of your Minneapolis based operation? Particularly if you’re considering selling off your business, an accurate, fair assessment of its worth to a potential buyer is absolutely critical. A valuation provides a useful starting point for negotiations as well as a guide to what price might reasonably expect to be realized. A challenge which many potential sellers encounter is how to ensure their valuation is as favorable as possible when the current economic climate is tough. An intriguing solution is to look beyond the domestic market and consider international buyers. Read on to find out why this trend is growing in popularity across the US.

Varying Economic Conditions Give Different Valuations

It’s common sense that business valuation in Minneapolis is going to yield disappointing results when the Twin Cities area is going through an economic downturn. If businesses are struggling to stay afloat then it becomes increasingly difficult to sell one for a reasonable sum. Luckily economic trends can fluctuate significantly between different countries, so while buyers in Minnesota might only accept a conservative valuation, in countries where the economy is buoyant and capital easily obtained purchasers might well be satisfied to pay more. Using a business brokerage with international reach is one way of locating foreign buyers who may pay more than domestic ones.

Different Types of Valuation

Remember that in Minneapolis the business valuation figure of your concern will vary depending on how it’s to be marketed. For example if you’re selling the enterprise as a “going concern” then a loyal customer base and good will could considerably increase its value. Conversely if you’re winding the business down and are just selling the premises and plant, valuation could be different. A professional business broker can advise on how to market your business to best advantage, both within the US and internationally, commanding the most favorable valuation while still being honest and transparent in your sales presentation.

Using an Intermediary Ensures a Win-Win Outcome

Obviously buyers won’t accept a business valuation for a Minneapolis based enterprise if they feel it’s unrealistic, while sellers clearly won’t accept a low offer if they can confidently expect a higher one. The advantage of using an intermediary is they will negotiate to reach a reasonable solution which benefits both parties. A professional business broker needs to satisfy both buyer and vendor in order to perform their role effectively, which is why using a business brokerage often results in a mutually agreeable sale being rapidly finalized.

Business valuation in Minneapolis is a complex process which can produce several different outcomes depending on when the valuation is undertaken, its purpose and its scope. Sunbelt Business Advisors can give you further information on how to obtain the most advantageous valuation of your business and also when and how to market it in the US and elsewhere in order to maximize your chances of a successful sale.

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