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Question added to topic FranchisesAugust 30, 2007

How can I be sure the asking price for a business is worth it?

How can I be sure the asking price for a business is worth it?
You can't really be sure ever, but of course you want to work with an established business broker, see a business plan, see past financials including actual reports to the IRS (people are less likely to fudge the truth on tax forms) and hopefully audited financials. The business broker should be able to help you see comparisons of other transactions of the same type.

Businesses aren't worth what the owner asks for them, they are worth what the buyer is willing to pay for them. If those are the same amount, you have a deal, otherwise, make an offer.

I have a related post on my blog at blog.timberry.com from January of this year and there is a related post on Anita Campbell's Small Business Trends blog from yesterday. You can also search the web for "business valuation."

Tim


Rosalind Resnick is a New York-based freelance writer, entrepreneur, investor and author of The Vest Pocket Consultant's Secrets of Small Business Success.

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