Several key factors will set the baseline for any business sale, and one of these is the asking price you initially lay out for your business when you list it on the market. Once this price has been named, one of the important tasks you'll be faced with moving forward is justifying that price to possible buyers -- buyers who are, naturally, looking to get the best deal they can.

At Utah Business Consultants, we're here to help. We assist clients with every aspect of selling their SLC business, including help with both setting and defending an initial asking price on the business as a whole. What are some of the basic financial and related tools that will help you both arrive at and justify your asking price when in negotiations to sell your business? This two-part blog series will go over several.

justifying business asking priceBasic Financial Statements

First and foremost, some of your most important resources for both arriving at and defending your asking price will be your business' basic financial statements. These include items such as:

These financial statements will give both you and potential buyers a clear idea of the value of your business, as well as what they might expect to see in terms of return on investment if they were to purchase it. With this information in hand, you can start to get a feel for what an appropriate asking price might be.

Market Research

In addition to looking at your business' financials, it's also important to do some basic market research to see how your business stacks up against others in terms of size, scope, and profitability. This will give you a better idea of where your business falls in terms of value, and can help you to determine a realistic asking price.

Once you've done your market research and financial analysis, you'll be in a much better position to set an appropriate asking price for your business.

Tangible Asset Value

Next up, you need to also take into account the value of any tangible assets associated with your business. This might include things like equipment, inventory, real estate, and more. These items need to be valued separately from the business as a whole in order to get an accurate sense of what they're worth -- after all, not every buyer will be interested in taking on these assets, so they shouldn't be included in the asking price for the business itself.

In part two of our series, we'll go over some additional themes like discretionary earnings, earnings multiples and more. For more on how to justify your asking price during a business sale, or to learn about any of our SLC business broker services, speak to our team at Utah Business Consultants today.

In part one of this two-part blog series, we looked at some of the primary reasons why it pays to work with a quality business broker if you're looking to sell your business. There are several major advantages to going this route rather than trying to manage all the ins and outs of a business sale on your own, and knowing about them is helpful as you enter this arena.

At Utah Business Consultants, we're happy to offer the very best business broker services available, assisting clients with the full scope of their business sale needs from start to finish. Let's look at some other reasons why business brokers are so valuable if you're going down this road.

value business brokers experienceSignificant Experience With Your Type of Business Sale

It's important to realize that there are actually several different types of business sale transactions. Each of these has its own unique qualities, and each will require a slightly different approach from the broker who's handling the process.

Simply put, it's very unlikely that most average business owners have a full knowledge of all of them. For example, let's take a look at the sale of assets vs. shares in a company. The two processes aren't necessarily interchangeable and haven't got the same level of complexity involved.

Our business brokerage professionals have plenty of experience to draw upon when working on deals like this, and they know what it takes to get deals done. This is a major part of our value.

Membership in Business Listing Sites

As you're putting your business out on the market, a broker will be able to help you figure out which are the most valuable business listing sites for your business's specific situation. In some cases, there can just be a couple of different sites that make sense; in other situations, there may be several good options available.

Either way, our brokers can tap into the resources needed to get your business listed with the most relevant sites possible.

Low Fees and Great ROI

When you compare the relatively small costs you'll pay to a business broker with the extensive hassle and time consumption that would go into trying to sell your business without any help, it's clear that the investment will be well worth it. With our business brokerage services, you'll find both affordable and flexible options for getting your deal done. With so much riding on the sale of your business, this is definitely something to keep in mind as you go forward with such an important financial event.

If you're looking to sell your business and make sure you get the best price possible, look no further than Utah Business Consultants. Let our experts help today! Call us at your convenience to set up a consultation or learn more.

There are many areas in the business world where working with outside advisors is often highly beneficial, and one of the top examples here is when selling your business. Working with a quality business broker will offer you numerous benefits during this process, and there are several good reasons why many business owners go this route for all their business sale needs.

At Utah Business Consultants, we're proud to provide the best business broker services available in Utah, helping with everything from business valuation to attracting sale clients and more. What are some of the chief benefits of utilizing a business broker when selling your business, especially compared to trying to handle all these details on your own? This two-part blog series will go over several important factors.

value business brokers financingIdentifying and Qualifying Buyers

One of the single most important and difficult aspects of selling a business is identifying and qualifying buyers. This process can be quite difficult, as there are often many potential buyers who express interest in purchasing a business but who may not actually be qualified to do so.

A good business broker will have an extensive network of connections in the business world and will be able to quickly identify and qualify buyers who may be interested in your business. This can save you a great deal of time and energy, and can ultimately help you to sell your business more quickly.

Ensuring Confidentiality

Confidentiality is of vital importance when selling a business, and this is something that a good business broker will be able to help with. When you try to sell your business on your own, it can be difficult to keep the sale confidential, as potential buyers may be able to easily find out about the sale through online listings or word of mouth.

A business broker will be able to work with you to keep the sale of your business confidential, ensuring that only qualified buyers are made aware of the sale and that your business operations are not disrupted during the process.

Helping Buyers Identify Financing

For some business buyers, one of the key obstacles to purchasing a business is financing. Many buyers do not have the necessary capital on hand to purchase a business outright, and securing financing can be a difficult and time-consuming process.

A good business broker will be able to help buyers identify financing options and will work with them to secure the necessary funds to purchase your business. This can make the entire process of selling your business much smoother and can help to ensure a successful sale.

These are just a few of the benefits that you can enjoy when working with a business broker when selling your business. At Utah Business Consultants, our team of experienced and knowledgeable business brokers is here to help you with every step of the process, from start to finish. Contact us today to learn more about our services or to get started with the sale of your business.

In part one of this two-part blog series, we went over some simple basics on what are known as fairness opinions in the business brokerage world. Referring to a report that speaks to the overall financial fairness of a proposed transaction, fairness opinions are common in business sale settings -- meaning they're important to know the ins and outs of.

At Utah Business Consultants, we're happy to serve as a top business broker in Salt Lake City and nearby parts of Utah, helping clients with everything from business valuations to the entire process of selling their business. When are fairness opinions used, and why should you consider using one during any business transaction you're taking part in? Here's a rundown.

Fairness OpinionsExamples of Settings Where Fairness Opinions Are Used

Here are some of the most common situations in which fairness opinions will be used:

As you can see, fairness opinions can be used in a variety of different business transactions. In each case, the goal is the same -- to ensure that all parties involved are comfortable with the price being paid or received.

Why Use a Fairness Opinion?

If you've never been involved in a business transaction before, you may be wondering why fairness opinions are used. After all, can't the parties just agree on a price and move forward with the deal?

There are a few reasons why fairness opinions are often used in business transactions. For one, you heavily decrease the risks associated with the deal. Remember, a fairness opinion is effectively an insurance policy -- if something goes wrong and it's later revealed that the price wasn't fair, you could potentially backs out of the deal or receive compensation for any losses incurred.

In addition, using a fairness opinion can help to pave the way for a smooth transaction. If all parties involved in the deal are comfortable with the price being paid or received, it's much less likely that there will be any problems or hangups during the process.

Finally, fairness opinions can add a layer of legitimacy to the deal. If you're selling your business, for example, having a fairness opinion can show buyers that you're serious and ready to move forward.

For more on fairness opinions and their use in business sales, or to learn about any of our business brokerage services in SLC or nearby areas, speak to the team at Utah Business Consultants today.

There are a few situations during potential business sales and related transactions where third parties may be utilized by one side or the other to gauge the fairness and details of a particular deal. Among several different such programs, one of the most well-known across the world of acquisitions and mergers is the fairness opinion.

At Utah Business Consultants, we're proud to offer quality business broker services in numerous areas, from creating business listings and helping you determine exit value to actually moving forward with the sale of your company. What is a fairness opinion, who is it typically provided by, and what are some of its uses within business sales and related acquisitions? Here's a rundown in this two-part blog series.

fairness opinions basics provides

What is a Fairness Opinion?

As its title indicates, a fairness opinion is a basic report that is designed to state whether or not a proposed financial transaction is considered to be fair from a financial perspective. In particular, fairness opinions are often used in business sales where one company is being bought out by another - but they can also be used for other types of transactions, such as investments and recapitalizations.

A fairness opinion will typically outline the key aspects of the financial transaction in question and then make a determination as to whether the price being paid by the buyer is fair, based on a number of different valuation methods. In addition, the fairness opinion will also assess any potential conflicts of interest that may exist - for example, if the party providing the opinion stands to gain financially from the transaction itself.

It's important to note that a fairness opinion is not the same thing as a valuation report, which simply provides an estimate of what a company is worth. Rather, a fairness opinion makes a determination as to whether the transaction itself is fair based on a number of different factors.

Who Provides Fairness Opinions?

In most cases, financial advisors from outside entities, such as investment banks or accounting firms, will be brought in to provide fairness opinions. This is because it's important for there to be an objective third-party assessment in order to ensure that the transaction is truly fair.

There are a few different ways in which financial advisors can be compensated for their services in providing a fairness opinion. In some cases, they may charge a flat fee for their services. In other cases, they may receive a percentage of the overall transaction value - although this is typically only done in larger transactions.

In part two of our series, we'll go over why fairness opinions are often utilized in business sales, plus some situations where they may or may not be necessary.

For more on this, or to learn about any of our business brokerage services, speak to the team at Utah Business Consultants today.

In part one of this two-part blog series, we looked at a couple types of business buyers who may show interest in your business if it's been listed for sale. Knowing the kind of buyer you're dealing with will often be very helpful for completing a sale, allowing you to understand motivations and craft a deal setup that makes sense for both parties.

At Utah Business Consultants, we're happy to help clients with a wide range of business sale services, from listing your business and determining a proper exit valuation to engaging with buyers and more. What are some of the other most common buyer types you may run into, and how can you make your business attractive to them? Here's a primer.

kinds business buyers turnaroundsPrivate Equity Buyers

A growing number of businesses are being bought by private equity firms in recent years. In most cases, these firms are investing other people's money, which means they're under pressure to deliver a return on investment (ROI) within a set amount of time, typically three to seven years.

To achieve that goal, the firm will likely seek to do one or more of the following:

Ideally, the firm will also have a plan in place for eventually selling the business at a profit.

As the seller, you may be able to negotiate a higher purchase price from a private equity buyer than from other types of buyers, but you'll also likely have less control over the business post-sale.

Turnaround Buyers

In other cases, buyers known as "turnaround specialists" may be interested in your business. These buyers are typically looking for businesses that are underperforming but have the potential to be turned around and made profitable again with the right changes.

Turnaround buyers typically have experience in identifying and correcting the specific issues that are holding a company back, whether it's poor management, outdated processes, or something else. They may also be more willing to take on businesses in industries that are struggling overall.

One thing to keep in mind with turnaround buyers is that they're usually more interested in the business itself than the existing management team. As such, you may be asked to stay on for a period of time to help with the transition or may be replaced entirely.

Sophisticated Buyers

Finally, this category refers to buyers who have already bought and/or started their own businesses in the past. This means they likely have a good understanding of the process and what's involved, as well as access to the capital needed to complete a purchase.

Sophisticated buyers may be interested in your business for a variety of reasons, including new market opportunities, a desire to expand their current operations, or simply because they think your business is a good investment.

One thing to keep in mind with sophisticated buyers is that they may be more likely to lowball you on price, since they understand the process and may be more confident in their own ability to turn the business around. It's important to have a good grasp of your business's value before entering into negotiations.

For more on this, or to learn about any of our business sale services, speak to the team at Utah Business Consultants today.

There are several questions you may be asking yourself or your business brokerage as you look to sell your business, and one of the broadest such concepts is this: What are buyers looking for? And while this is a totally fair question, it's one that requires a bit more nuance and detail to break down -- and one of the most important areas while doing so is understanding the different kinds of business buyers out there.

At Utah Business Consultants, we're here to help you with every aspect of selling your business in Salt Lake City, from proper valuation through identification of ideal buyers and numerous other areas. What are some of the different kinds of buyers out there, and how can you identify your primary targets and make your business as attractive as possible to them? This two-part blog series will go over several important themes.

kinds business buyers first-timersFirst-Time Business Buyers

One notable group of business buyers are those who will be purchasing their very first business. Obviously, this is a major life decision, and one that comes with a great deal of excitement but also some inherent risk. Because of this, first-time business buyers tend to fall into one of two main categories:

Strategic Buyers

While this term can mean a few different things, in the business sale sphere it tends to refer to business investors who purchase businesses within the same (or similar) industry as one another, with the goal of expanding their operations.

Oftentimes, strategic buyers are looking for businesses that will serve as a complementary addition to their existing portfolio -- say, a company that provides parts or services to the same customer base. In other cases, they may be looking for a business that gives them a larger footprint in their industry or region.

In part two of our series, we'll go over some additional buyer types and how they might view your business. For more on this, or to learn about any of our business valuation or business sale services to SLC and nearby clients, speak to our team today.

In part one of this two-part blog series, we looked at some of the formats typically used by business owners as they look to properly value their business ahead of a sale. This is a vital part of the process in any such sale, and knowing how to navigate it will often make a big difference toward your eventual success.

At Utah Business Consultants, we're here to offer a wide range of business broker services, including comprehensive business valuation solutions that are enormously beneficial to many of our clients. In today's part two of our series, we'll look at some basic tips we offer as you move forward with your valuation, regardless of which type you're using.

reducing grayware mobile threatsFinancial Statements and Seller's Discretionary Earnings Statement

One of the first important things to understand is that the business valuation process will almost always require a close look at your financial statements. This is vital information in understanding what a business is worth, and it's important to be as accurate as possible when putting this together. If you're not comfortable doing this yourself, seek out help from an accountant or other financial professional.

In addition, you'll also need to prepare a seller's discretionary earnings statement. This will look at the business's net income, adding back in expenses that are considered discretionary for the owner. This might include travel expenses, for example, or certain entertainment costs. This can give you a clearer picture of how much profit the business is truly generating.

Asset Value

Next up, you have to determine the asset value of the business. This will look at both physical assets, such as equipment or inventory, and intangible assets, such as intellectual property. Once again, it's important to be as accurate as possible in valuing these things, as they can play a big role in the eventual sale price.

Using Price Multiples

As you move forward with your valuation, you'll also want to consider using price multiples. This is a method of valuing a business based on certain metrics, such as earnings before interest and taxes (EBIT), sales, or earnings before interest, taxes, depreciation, and amortization (EBITDA). This can be a helpful way of coming up with a number, particularly if you're not entirely comfortable with the other methods.

Using Comparable Businesses

Another option is to look at comparable businesses that have recently been sold. This can give you a good idea of what similar businesses in your industry are fetching on the open market. Just be sure that you're comparing apples to apples, as businesses can vary greatly in terms of size, profitability, and other factors.

For more on some of the important elements you need to be considering as you assess your business valuation ahead of a sale, or to learn about any of our business broker services, speak to the team at Utah Business Consultants today.

There are a few parts of the business sale process that are extremely important for any business owner, and proper valuation of the company is at or near the top of any such list. And while you might have invested years of your time and effort into this business, it's vital to be able to approach this process with as objective an eye as possible, as setting a fair market valuation will have a big impact on your chances of a quality sale.

At Utah Business Consultants, we're happy to assist our clients in exactly these areas. Our business valuation services are second to none in Utah, with local business brokers who understand the ins and outs of the market and will help you attain a fair-but-beneficial valuation that works for you and also makes your business likely to be sold. In this two-part blog series, we'll go over some simple tips we often provide clients on this process -- today's part one will go over a few common methods of business valuation you may take, while part two will look at some general tips we offer regardless of which specific method you use.

Meta Description: What are some basic tips for ensuring your business valuation is done properly if you’re preparing to sell? Here are some methods.Income-Based Business Valuation

Perhaps the most common form of business valuation is one that's based on projected future cash flow and earnings, which is also commonly called an income-based valuation. This number is arrived at by looking at the business' past performance, as well as its current and projected future state.

In order to come up with this estimate, the valuator will need to have intimate knowledge of your industry, your company's financials, and where it stands in the market. They'll also need to make some assumptions about future growth, which is why this form of valuation can be less accurate the further out you try to project.

Asset-Based Valuation

Another common form of business valuation looks at a company's assets rather than its income. This number is arrived at by valuing all of the tangible and intangible assets that the business owns, and then subtracting any debts or liabilities. This valuation method can be helpful if your business is in a slow growth period or has recently experienced some financial difficulties.

It's important to keep in mind that this form of valuation doesn't always give an accurate picture of a business' true value, as it doesn't take into account things like future earnings potential or the value of the company's brand. However, for many situations, it's a viable process for business owners to use.

Market-Based Valuation

This form of valuation looks at what similar businesses have sold for in the past, and then uses that information to arrive at a valuation for your business. This method can be helpful if you're selling a business in a well-established industry where there is a lot of data available on past sales.

To use this method, the valuator will need to find comparable sales of businesses in your industry and region, and then adjust for things like size, growth potential, and profitability. This valuation method can be tricky to get right, but when done correctly it can give you a good sense of what your business might be worth on the open market.

For more on the forms of business valuation you should consider, or to learn about any of our exit planning or business valuation services, speak to the team at Utah Business Consultants today.

© Copyright 2023, Utah business consultants