Thinking of listing your business for sale? Here’s how to get the best price.

Selling a business can be tricky. You’ve spent years cultivating your brand, building up a base of loyal customers, and now, you want to make sure you get the right price for your creation. On the other hand, you want to stay realistic about your business’s value and avoid letting sentimentality get in the way of a good deal.

BusinessesForSale.com offers a handy valuation guide to help business owners correctly value their business and make sure it doesn’t sell for a penny less than it’s worth. We’ve collated our top tips to get the maximum price for your business with minimal stress.

Value your business correctly

With the median company selling price rising by 6% year on year, you want to maximize your business’s price as much as possible. However, pricing your business too high might turn off potential buyers and keep your business sitting on the shelf for too long.

To accurately value your business, you can try one of three approaches: the asset approach, the income approach, and the market approach.

The asset approach focuses on a company’s NAV (net asset value). This method involves adding up all the company’s assets, including property, furniture, equipment, and intellectual property, and then deducting liability. This method is more suited to businesses that are performing poorly, since it ignores potential earnings.

Then there’s the income approach, which involves calculating the current net value of the business’s income. You’ll then project the future cash flows to determine the business’s present value.

Many businesses sell for five to ten times their EBITDA (earnings before interest, taxes, depreciation, and amortization), which should give you a rough idea of your company’s value.

Finally, you can try the market approach. This offers an estimated price based on the market demand and the price of similar businesses when the sale price is compared to revenue or earnings.

The best way to value your business accurately is to combine these three approaches into one method with the help of an industry expert and financial advisor.

Make sure the business is self-sufficient

The better a business can run without you at the helm, the more attractive it will be to a potential buyer. Anybody buying your business will want a transition that’s as seamless as possible and that includes minimal management hiccups.

Before putting your business on the market, step back from the day-to-day running of the company and ensure you have motivated staff in place that can maintain the business in your absence. This future-proofing will make your business a more attractive prospect for buyers.

Get your accounts in order

Nobody wants to buy a business that hasn’t got its house in order. With the help of an accountant if necessary, go through your financial accounts with a fine-tooth comb and make sure your financial statements match up with your management accounts.

Having robust and transparent accounts will build the trust of any potential acquirer, while cementing your company’s legitimacy.

Boost your brand awareness

If the eventual buyer of your business wanted to build a brand from scratch, they’d start their own business. Acquirers are looking for companies with a strong brand and market presence, so develop yours to make your business as attractive as possible to potential buyers.

Create a strong brand presence using digital marketing and social media, capitalize on your USPs (unique selling points), and establish a recognizable tone of voice. The more established your business is as a unique player in the market, the higher the price a buyer will be willing to pay.

Get expert advice

It’s more than possible to sell your business without external input, especially if you’re selling to somebody you already know, but less experienced business sellers may want to employ experts to make sure they get the best price on their business for sale.

A broker generally takes 10% of the sale price of a company valued at under $1 million. This rate might seem pricey, but brokers can free up your time while you continue to run by business by taking on the stress of selling on your behalf. Plus, in many situations, a broker can get you a better deal.

The bottom line

Getting your business correctly valued is the first step to selling it for a great price, and BusinessesForSale.com is full of handy valuation tips, including a valuation guide, and a useful tool called ValueRight.

While you’re working to sell your business, make sure not to let profits, brand awareness, or productivity slip, as the more successful your business, the more attractive it will be to buyers.