Many people have an unrealistic opinion of what their business is worth. They know how much they need to live on for the rest of their life and they believe that their business should be worth what they need to live on. Unfortunately the two are unrelated to each other, what you need to live on and what your business is worth are totally independent of each other.
Many people believe that their business is worth more than it is. I have heard comments that I have a great client to die for but I only did $10,000 business with them last year therefore I am worth a premium. Why, you value companies based on their profit. A company is more desirable if they have better customers but is it really worth more if your customers are major companies compared to small companies? It may be to the right buyer but not to everyone. If you have large customers and a company buys your business, can they sell the large customers some other products which they carry? If so, they will be more interested in buying your business because there is a synergistic benefit. The synergies may not be with your business but with other businesses owned by the buyer of the business. If there is no synergy with the buyer of the business, I am not sure if there anyone will pay a premium for your customers. It is easier to obtain bank credit for triple A customers than no name customers. That will help sell the business however it may sell the business faster but not necessarily for a higher price.
If you sell your business for market price and ask market price, you should be able to sell your business faster than an over priced business. Many people hope that if they over price their business, someone will overpay for the business. Realistically, most buyers are looking to buy now, not later and if they believe that you are asking too much for the business they will not keep checking to see if you bring down your price in the future, they move on to looking at the next business.
If you are selling your business and your are listing your business on www.thebusinessplace.com make sure that you provide a good description of the business. You are preparing an over view of the business and should write it in such a way as to entice someone to want to contact you. There is a correlation between how large the listing of your business for sale is and how many responses a seller of the business or business broker receives. Many people believe that if they put up a sign that someone will come. If you provide no description, no one knows what you are selling and will not make the effort to find out. Are you missing out on potential buyers – definitely. You have one opportunity to get someone interested, make sure that you give them a reason to be excited when they read your listing. If they do not find your business for sale very interesting, they will not contact you. You could have a business which is the perfect match but if you do not tell them, they will never know. Too many people list their business for sale and write down one line of description. It is very hard to get an idea of what they are selling. Some sellers and brokers write 30 lines of information or more. They are the ones who are getting buyers of businesses to regularly contact them.