Simply put - an educated business buyer does not care so much where the business is or what potential it has. The buyer wants to know ONE THING - and that is how much can they make per year - also known as "cash flow". So most business owners VASTLY UNDERVALUE their business because they "reduce" their price instead of "proving" a value.

Placing a market value on a business for sale is one of the truly confusing aspects of a business owner trying to sell on his or her own.. Such thoughts as “it is what I need to retire on” or “it’s what I put into it” are not methods for determining what a business is worth on the market. Too many business owners also concentrate on gross sales without proper knowledge of the basic operating expenses to profit on their business (cash flow). Cash flow is the true profit of the business and the asking price should be a variable on cash flow. Cash Flow - not gross sales - determines the profitability of the business.

A Business Market Valuation is the key to proving a value to a business buyer. You can tell the buyer the business is worth "X" amount but what proof do you have? The buyer wants to see concrete facts laid out in an easy to understand format. And while the buyers want to see the actual cash flow of the business - most business owners and - scary as it seems - many business brokers - have no concept what "cash flow" really means. Whether hiring us - another broker - or selling on your own - the single greatest tool that you can have is a third party Business Market Valuation.

One of the main problems of owners selling their business on their own is that they grossly undervalue their business. This results in far less proceeds from the sale than what they could have gotten by using a professional to assist them.

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