Why get a 3rd Party Business Appraisal before going to Market? An Exiting Perspective…

1.The Buyer’s lender will demand one and there is a good chance yours will match the one subsequently ordered by the Entering buyer’s bank. Do you only want an appraisal from the buyer’s and lender’s perspective?

2. Pre-financing can be arranged for the potential Entering buyers of your business. This also gives you insight into the buyer’s capacity and character. If the Entering buyer (key employees or outsider) is not credit worthy, precious time is not wasted and the ensuing confidentiality risk is minimized.

3. You are in control of the selling price. What more needs said?

4. You are in control of potential buyer’s offering price and their perception of your business. Remember, your business only gets one chance at a good first impression.

5. If the Appraisal comes back lower than your Exiting Strategy needs, steps can be taken to improve your businesses cash flow before it is too late. You do not want the rude awakening that could come from an educated buyer’s low-ball offer.

6. You are in control of the buyer’s team of advisors. In addition, data gathering during the appraisal process can reveal any potential due diligence problems that could arise later.

7. Your business will stand out versus the poorly presented businesses for sale. Remember, your business is competing against other investment opportunities that potential buyers are investigating. The certified, third party appraisal makes your business look more appealing and professional.

8. We live in a litigious society. The certified, third party appraisal is your best weapon against buyer’s remorse and any charge from the buyer that they overpaid.

9. A rule of thumb appraisal or one done by a member of the Exiting team could be seen as tainted. A potential buyer will discount the asking price if a qualified certified, third party business appraisal is not done at arms-length.

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