Don’t Let Your Misconceptions on What Drives Premiums and Discounts Lead You to Bad Decisions | Business Exit and SuccessionBusiness Exit and Succession

"Logic and reasonableness never seem to be plentiful supply when business owners and their regular advisers start talking about the value of the owner’s business.  Among the exit/succession professional community there is much wringing of hands about this.  Anyone with any length of time doing business sale transactions understands that there is a relatively tight pricing range for smaller and middle sized business that is approximately 4 to 5 times operating cash flow (with various adjustments for owner compensation, cash on hand, debt, etc.).

However, I’ve had many non-exit/succession professionals come to me over the years and ask, “Surely there are businesses that earn more than the average price?”  And they are right.  There are businesses that earn premiums.  But what they don’t ask as often is, “Surely there are businesses that are going to go at a discount or be unsalable?”  Which is unfortunate as there are many, many more businesses that go for discounts or are unsalable than can earn premiums."

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Don’t Let Your Misconceptions on What Drives Premiums and Discounts Lead You to Bad Decisions | Business Exit and SuccessionBusiness Exit and Succession:

For additional information regarding Florida business sales, acquisitions and valuations, please contact Eric J. Gall at info@buysellflbiz.com or 239.738.6227. Also, visit our Florida Business Exchange website at www.fbxbrokers.com and my personal website at www.buysellflbiz.com.