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Sell your finanace business a good value

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  • #18196

    Sell Your finance Business is a tricky endeavor, but even more so with a service business where the main asset is the client list. There is no magic valuation that you can calculate, but you can come up with a range of values that your sale price should fall into.

    The bottom end of the range (or the floor) should be the liquidation value of any hard assets. You may have computers, desks, chairs, and other office furniture and equipment. You may even own a car in the business. The amount of money you could reasonably make from the sale of these used assets, minus paying out any loans connected with them, represents liquidation value. Your business cannot be worth less than that.

    In order to calculate the high end of the range, you must analyze your annual revenues. This tells you how much a new owner could bring in every year if all of your existing clients stayed with the business after the sale. A common valuation standard used is one year’s revenues. For example, if your average annual revenue before expenses was $210,000, that would be the top end of what a new owner would pay for it.

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