Top 3 Business Valuation Mistakes to Avoid

Many business owners think they know how much their business is worth, but without a professional business appraisal or valuation, risk seriously undervaluing their largest asset at Exit. 

A mistake can cost you hundreds of thousands, if not millions of dollars. 

When the time comes for a business valuation, avoid these top 3 mistakes.

  1. Using an unqualified business broker. It’s important for you to ask the right questions to be certain the brokerage firm you choose is qualified. To know which questions to ask, view our video on the top 8 questions to ask a business broker.
  2. Relying on company multiples that are not comparable. Just because someone you know sold their business for 5x or 6x multiples, does not mean that your business will as well. A comprehensive business valuation will give you a realistic expectation of what the market will bear. 
  1. Incorrectly calculating cash flow. Using the wrong method of calculating cash flow can leave you with unrealistic expectations of what your business is worth to an investor. 

Want to know what your business is worth? Even if you’re not planning on exiting right now, I invite you to speak to one of our business valuation experts. Here is a link to schedule a confidential consultation. All of our conversations are extremely confidential. We even send you an NDA before our call.