Top 6 Factors That Influence the Value of Your Business

86 group - 6 factors selling a business

Whether you’re looking to sell your business now, or in the near future, there are common factors that influence the value of your business. Here at The 86 Group, we pay close attention to these factors so that our clients achieve maximum value when selling. 

There are several determining factors that can play a part in the value of your business.

Here are the top 6:

  • Interest rates for the buyer: Most buyers will finance the purchase of a business. With interest rates on the rise, what the buyer can afford may affect the final purchase price. 
  • Current Capital Gains tax rate: Currently at 20%, but can be as high as 40%, affects your profit when selling. 
  • Demographics of the business location: If your business is located in an area experiencing growth – like Dallas Fort-Worth – the buyer can project more cash flow which increases your business value.
  • The current economic cycle: Businesses affected by Covid or other things going on in the marketplace may have an impact on the value of your business.
  • Strategic buyer efficiencies: A buyer in your industry that can share overhead by combining with their business can afford to pay more.
  • Sell when the market is ready: This may be different from when you are ready, but timing is everything. And now, is the right time. 

When you’re ready to sell, you need to hire an experienced M&A firm that keeps the information about the sale of your business strictly confidential. Schedule a consultation with The 86 Group today!