Business owners often ask, “What multiple are businesses like mine selling for?”
It is a reasonable question. It is also incomplete.
An individual buyer may ask whether the business can pay acquisition debt and still provide an income.
A strategic buyer may see customers, capabilities or cost savings that do not exist for another buyer.
A private equity buyer may focus on EBITDA, management depth, scalability and future acquisitions.
A competitor may care most about geography, employees, contracts or market share.
Same company. Same financial statements. Different buyers. Different economics.
Before selecting an identifying a price, identify who is most likely to buy the company and why it would be valuable to them.
Thought to ponder: Who do you think would see the greatest value in your business?
#BusinessValuation #BuyerStrategy #ArizonaBusiness