Distribution Business Broker – Why Business Valuation Methods Are Not Accurate

One of the key reasons you should hire a distribution business broker is so as to help with business valuation. There is a lot that goes into valuing a business. That is why at So-Cal Business Brokers we are committed to offering the most comprehensive services in business valuation. Our team has been involved in the sale of distribution businesses for more than 20 years. We know what buyers look for in a business like yours and how to get the most accurate valuation report. We are in the best position to help with business valuation, pricing and negotiations.

All in all, even as you work with the best distribution business brokers in the business, it is important to note that the valuation report you get will not be 100% accurate. But why is this so? In our experience, here are the main reasons why business valuation methods are mostly not accurate.

Economic conditions

The U.S. economy affects all businesses; big and small. The businesses are affected in many ways. The local economies also have an even bigger impact on the businesses. While textbook calculations will help determine the value of a business, the value will not be as accurate. This is for the simple fact that you cannot account for every economic condition. It is for this reason that at So-Cal Business Brokers in addition to using textbook formulas we also perform market research. This enables us to get an even more accurate valuation of your business.

Location and market factors

The location of your business will also play a huge part in business valuation. As you evaluate the selling price of your distribution business you have to keep in mind the location factors. Your immediate neighborhood and how conveniently located the business is will determine how much you will be able to sell it for. As aforementioned, our distribution business brokers will perform market research to better understand the market factors that may affect the selling price of your business. After the research we will be able to advice you accordingly when pricing.

Technology factors

It is hard to put a value on the level of technology that is being used by a distribution company. The technology being used will, however, play a huge part in the sale.

Intangible assets

Last but not least, placing value on intangible assets is also very hard. The determination of a business value is only realized when a willing buyer and willing seller sit down and come to an agreement.

Contact us today and take advantage of our free business valuation services. We genuinely want to help you sell at maximum profit, to the right buyer and within the shortest time possible. Contact us now for a free consultation with our in-house distribution business broker.

Distribution Business Broker