Thinking of selling your Colorado business? Colorado boasts 563,917 small businesses that employ 991,542 people according to the annual Small Business Association’s Small Business Profiles for the States and Territories. Did you know that last year, a survey sponsored by Citizens Commercial Banking showed that in 2015 the prime reason medium-sized or “middle market” business sellers looked for help from an independent business brokerage professional was to find out how much their company is worth? (Middle Market M&A Outlook 2015).
There are several different reasons why the owner of a business should seek outside help in putting a price tag on the company they wish to sell. Most business owners are very intelligent and capable people when it comes to running a successful business. But most entrepreneurs will only sell one business during their working lives. So it’s understandable that you wouldn’t be an expert in something you’ve never done before.
Business brokers know several ways to value your business
Unless you’re in the business of selling businesses, a professional business broker knows more than you do about how to sell a Colorado business. A good broker can make or break a sale. However unique your think your business or situation is, an experienced broker has probably dealt with something similar—maybe even more than once. If you’re selling your business, you can use the broker’s experience to your advantage. Your business transition professional can advise you which business valuation approaches are right for you: asset-based, income-based or market-based. Your broker can answer the question, “how much is my Colorado business worth?”
Business brokers are company valuation experts
Working with outside expertise makes sense, when you consider that at the lower end of the scale, it could be that the founder/owner of the business is still running it day-to-day. If the business owner is now tasked with operating an enterprise worth $25 million, when does he or she have time to become an expert at the valuation process? When you are thinking of selling your Colorado business, and you still run it, you have to keep it running smoothly, not learn how to be a business broker. As the owner of a company, you don’t want to focus on the different valuation methods when you list your business for sale. You want to keep your focus on continuing to build the value of your business. Distractions can be costly.
Your business broker doesn’t have emotional ties to your company
If you’ve invested most of your career turning your idea into a successful business, it’s understandable that you may have mixed feelings about selling your Colorado company. Those mixed feelings might mean it’s nearly impossible to really invest yourself in the process of marketing the business to potential buyers. You wouldn’t be the first business owner who accidentally chases away a buyer with an asking price that is far more than your company is worth, because you’re emotionally attached to it. Another reason it makes sense to work with unrelated parties like business brokers? Objectivity. Lenders and buyers demand cold, hard facts about a business for sale. A professional business broker doesn’t have the same “baggage” about the company as the people who built it from nothing.
If you’re struggling to put together an accurate valuation of your Middle Market firm, now may be the best time to contact a professional business broker to help you value and sell your Colorado business.