The Market is the Market

As professional brokers who specialise in the sale of small to medium size businesses, we often receive requests to conduct appraisals from owners who are considering selling in the next few months. This makes sense, as it is of the utmost importance to consult those who are selling businesses if you are considering selling yourself.

Our appraisals are based on proven methods which are widely accepted and supported by sales evidence. However regardless of how rigorous this analysis may be, in every business sale transaction it is ‘the market’ which determines the ultimate sale price and business value. As in the end it is what the buyer and seller agree that becomes ‘market value’.

This can vary due to certain circumstances, to understand this we can look at a definition of ‘market value’. It is ‘the price a business would change hands between a willing and able buyer and a willing and able seller, acting at arm’s length in an open and unrestricted market, when neither is under compulsion and when both have reasonable knowledge of the relevant facts’.

The eventual sale price can therefore vary up or down depending on buyers/sellers and market conditions, and during and after COVID19 the same applies. As there are over motivated sellers and buyers in each industry sector, some sectors have continued relatively unscathed or even increased profitability, while others have had more severe downside effects.

For more details or a business assessment and action plan for selling your business during these times, call me or one of my team at Verified Businesses today.