The simple answer is ‘no’, you don’t need a valuation to sell a business.
However, in terms of engaging JPAbusiness to sell your business, the answer is ‘yes’: we always recommend clients have their businesses independently and professionally valued before they invest time and money in a sale process.
In this week's video I explain how our first experience of helping a client sell their business – combined with our many years of subsequent experience – has shaped this philosophy regarding valuation and its role in a successful sale process.
Independent advice critical
When seeking advice on the value of your business, make sure that advice comes from someone with experience and knowledge in your market. They should also be independent in terms of their position in giving you that advice.
That’s why, in doing a valuation for a client who is looking to sell their business, we will not be engaged by that client to sell their business until after we have given them independent advice on their business value.
Information lets you weigh up options
So, yes, you can go to the market without a valuation, but the risk is you’re going to die wondering why you didn’t sell your business or get what you thought you should have gotten for it.
Knowing the facts and being well informed as to your business’s potential value will provide decision support and help you go to the market with confidence.
Alternatively, it may help you decide there are other options in terms of getting that value out of your business, if the valuation indicates that taking it to the market may not be the best course of action.
If you would like support with any aspect of selling your business, contact the team at JPAbusiness on 02 6360 0360 (Orange) or 02 9893 1803 (Parramatta) for a confidential, obligation-free discussion.
James Price has over 30 years' experience in providing strategic, commercial and financial advice to Australian and international business clients. James' blogs provide business advice for aspiring and current small to mid-sized business owners, operators and managers.