What is Your Company Worth?

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Book Value Does Not Reflect Your Market Value

The buyer's perceived "value" will determine the price. If the buyer thinks the price is too high in relation to the "value" delivered, they won't buy.

That is your challenge when setting the price for your business. The price that you get for your business will depend on how you market the business and to whom you market.

It is critical that you follow these two rules when setting price:

  1. First, substantiate the true market value for your business:
    Picking a number out of the air will be challenged. You can substantiate your price by establishing a "true market" value on your company assets, sales, cash position, and market.

  2. Second, market your "value" to right segment of buyers:
    A buyer who has a clearly defined strategy why they want your business may pay a premium over your set price. Another buyer who is only interested in your company assets may be less willing to pay anywhere near the asking price.


About This Guide

This module reviews business valuation and setting price. Topics include business value worth, buyer measurement, and substantiating your pricing strategy. Also review our free business valuation formula to help establish your price.

Topics Discussed:

selling prep