{"id":3948,"date":"2021-12-11T03:09:59","date_gmt":"2021-12-11T03:09:59","guid":{"rendered":""},"modified":"2024-03-26T17:09:06","modified_gmt":"2024-03-26T17:09:06","slug":"a-guide-for-determining-a-reasonable-price-for-your-small-business","status":"publish","type":"post","link":"https:\/\/www.sunbeltcanada.com\/atlantic\/a-guide-for-determining-a-reasonable-price-for-your-small-business\/","title":{"rendered":"A Guide for Determining a Reasonable Price for Your Small Business"},"content":{"rendered":"
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There is a considerable difference between determining the value of a privately-held company and a publicly-held company. Topping the list of considerable differences is the fact that privately-held companies do not have audited financial statements. Let\u2019s look at how the owners of privately held companies should proceed in establishing a reasonable price for their company.<\/span><\/p>\n

An audited financial statement is a costly endeavor. In order to avoid the cost, many companies simply don\u2019t go public. Of course, it should be noted that publicly held companies, as the name indicates, reveal much more about their finances than their privately held counterparts do. Privately held companies are often seen as being more mysterious whereas publicly held companies are considered more \u201copen.\u201d<\/span><\/p>\n

Business owners looking to sell their business will, of course, want to address the fact that their company lacks the public information associated with publicly held companies. Providing prospective buyers with as much verified information about your business as possible is one of the fastest and easiest ways to overcome buyers\u2019 concerns. A smart move for any business owner is to work closely with their accountant to go over the numbers and create an easy-to-understand presentation for prospective buyers. This should serve to allay many of their concerns.\u00a0<\/span><\/p>\n

Working with your accountant is only the first step in providing prospective buyers with the information they need to feel comfortable. The second step is to work with an outside appraiser or other expert who can determine the value of your business. After that, you\u2019ll want to decide on what your market price will be, as well as your \u201cwish price,\u201d or the price that you would ideally want. Third, you must know your \u201crock bottom\u201d lowest price. You, as the owner, need to have this information as it will greatly facilitate and streamline all negotiations.\u00a0<\/span><\/p>\n

When buyers are reviewing materials and working to determine what price they are willing to pay, they will look at a wide range of factors including:\u00a0<\/span><\/p>\n