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Three Reasons a Buyer Might Pay More for Your Business

Before you decide to put your business up on the block, make sure you fully understand how much what you're offering is worth to buyers.

This story appears in the December 2011 issue of Entrepreneur. Subscribe »

The Value-Creation EquationthA friend approached me recently about selling his manufacturer's rep company. He has done well being a middleman between a dozen buyers and suppliers in the automotive sector. Though the business is real (with revenue, expenses, etc.), we're perplexed about how to sell it. All he would be selling is himself and his relationships.

There are lots of successful businesses that can't be transitioned with a sale. Building startups with the goal of an exit means knowing what you have to offer and what it is worth to a potential acquirer. There are many motivations for businesses to acquire others, but most boil down to the following:

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