The #1 question of “What is my Florida Business for sale worth?” can usually be answered by contacting a qualified Florida Business Broker.
Of course, everyone knows the value of anything is what a willing buyer will pay and what a seller will accept, but valuing a business does go way beyond the scope of the ordinary. There are many facts and a number of myths that are typically discussed when talking about business value. One myth that surfaces in many conversations, which is almost always false, is that a business is worth 3 times the amount of gross annual sales. Such myths and fallacies often make it difficult for a business owner to implement an exit strategy when the time to sell does arrive. Without a reasonable expectation and a general idea of what a Florida Business for sale is worth it can be very difficult to plan for the future business sale.
Business valuation is as much an art as a science and every business and each industry can be a little different and have its own nuances. These differences make it near impossible to use a “one size fits all” approach, although most industries do have one or more “rules of thumb” that can be used to help determine the true value of the business. Business uniqueness and variables from industry to industry further complicate the business valuation process which is why business valuation are typically done by highly qualified individuals who have the knowledge and resources to form an objective opinion of value. While business valuators do employ standardized formulas and methods to calculate value, they also work from assumptions that are based on experience in the market place and familiarity with similar businesses.
Some Florida Business for sale valuation methods include taking a 4 step approach to determining what the business might be worth. These valuations can include an industry method, income and asset approach, excess earnings method and an income capitalization approach.
Income/Asset – This approaches uses a calculation of the fair market value of the assets of the business plus a multiple of the seller’s discretionary earnings or owner benefit.
Industry Method – This method uses industry “rules of thumb” which have been established and can be unique to any particular industry.
Excess Earnings – This approach takes into account numerous different factors including owner benefit, working capital to start, fair market value of assets, reasonable owner salary and how difficult it is to operate any particular business.
Income/Capitalization – This method looks at business income and owner benefit as well as reasonable owner salary as well as an expected rate of return in order to determine business value.
By looking at the industry comps and the business value through varying methods and calculations, a qualified Florida Business Broker can usually get a pretty accurate picture of the business value and is able to answer the question of “what is my Florida business for sale worth” with a fairly high degree accuracy. Whether to change a career path, relocation or retirement for many business owners knowing the value of their Florida business for sale can be the first step for creating a good exit strategy. More information about business valuations or selling a Florida business can be found by contacting a Florida Business Broker.