When one sells residential real estate, an independent appraisal report must be completed for financing to be approved for the sale. A business is much more complex and far too many businesses fail to take this step. Given the complexity of a business sale, Andrews Network Affiliates recommends a viable business valuation be performed by an independent third-party valuation service to assist in expediting the sale.
A business owner should be prepared for lengthy negotiations without a third-party valuation report because it will be the seller's versus the buyer's opinion of value. Business brokers who prepare their own in-house valuation report lack the credibility buyers require, given the compensation conflict inherent in broker evaluations. A buyer will also place limited credibility in the value arrived at by the seller's accountants for the same reason.
In the business brokerage industry valuation reports have wide variances in quality. Many brokers rely on generic valuation reports that are based on unproven theories. A seller should determine the following: Was a true analysis of the business performed? Were factors such as industry trends, age of the business, client base, and other factors that will affect the price taken into consideration?
Andrews Network Affiliates uses the services of the largest, independent third-party valuation service in America to complete these reports for our clients who are trying to secure full market value for their business.