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Need Help Pricing Business I Want To Sell!

My business is currently (2) years old. Ecommerce, sales, manufacturing (contracted out) Currently have an office with 5 FT employee's. Gross Sales in 2009 were about $1.3Mil, and we are on par for that in 2010. Cash Flow is roughly $175k - $200+k (all verifiable) Owner can even be absentee if need be, an accountant/bookkeeper would just need to be hired to take care of billing (something I currently do).

With that in mind, what would you be asking if this business were yours ?

Thanks!
J

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Answers (3)
Steve Skrlac
Keystone Business Brokers Inc.
Business Brokerage Services in Ontario, Canada

Hi... the truth is that there is far too little information here in order to provide you with a proper answer. If someone does give you a number, they are not then qualified to be doing valuations or should know better. You really should seek the services of an accountant experienced in business valuation or an accredited business valuator. Determining business value is realy an art and a science. I wrote a quick article (link below) on the process and some methodologies used that may be helpful. Good luck.

Feb 4, 2011
Alan Clark
The Hatteras Group
GA

Sounds like a great business, I would love to learn more. If the "cash flow" includes owner's compensation, net profit, depreciation, interest and other reasonable adjustments, an asking price of about 3X that would be reasonable and attractive, so about $600k, with room to work based on terms. But there are a lot of other factors to consider and more details would be needed. I would be glad to review with you if you want to contact me.

Jun 14, 2010
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The BAF Group LLC
MD

I would be happy tto talk to you about this, in greater detail. However, giving specific pricing with this level of detail would be questionable.

And two (2) years is an okay time element, but you would have far better pricing and ease of sale with just one more year of experience. The vast majority of Buyers and practically all lending sources will want three (3) years of history. Your situaiton would not defeat your plan to sell, but it can have some limitations on you.

Give me a call at (410) 715-0700.

Jun 14, 2010

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