I valued a nice family business, established many years and with a good level of profitable turnover (turnover nudging £400k).
Having run through the usual fact find, obtained accounts information, raised queries etc. I reckoned the business had a value circa £125,000 to £150,000. Of course, any business valuation is a matter of opinion and the old cliche is, it's worth what somebody is prepared to pay. But, knowing that any vendor wants maximum value for their business I tend to run on optimistic principles but try to add a touch of reality. If this client had asked me to advertise at (say) £175,000 I would have been quite happy to do so.
Anyway, after discussion the prospective clients decided that they would prefer to continue running the business for a year or two longer. Although they were approaching retirement age they felt they had the energy and drive to continue for a while - no problem there.
So, today, looking through www.businessesforsale.com I find the business advertised by another broker for £255,000. Now I don't have a problem with competition and if the client preferred the other broker then fair enough. Also, the broker may have found value in the business that I simply didn't find. But I doubt it.
All too often I see businesses blatantly over-valued to get the instruction, usually to get the big fat upfront fee also and to lock the vendor into an unfathomable lengthy selling agreement as well!
I sincerely hope that isn't the case here and that the vendors achieve a sale at a good price. Maybe I'll give them a call and see how it's going.
Keith Green - selling businesses and advising SME business owners since 1997 and still enjoying it.
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