Pricing a San Diego Business for Sale

The biggest question buyers have when looking at a business for sale is what is the right price to pay.

While there is no exact answer to that question, the answer does have some basic guidelines. The business must be able to support whatever debt may be added to it to finance part of the sale and it must also be able to pay the new owner a reasonable return on their investment, either in terms or salary or profits, or a combination of the two.

No two businesses are the same, and so it is impossible to use a general guideline or pricing formula to come up with an accurate price for any specific business. While there are general rules of thumb for some businesses, a buyer must evaluate each business based on its own merits for things like:

  • Terms of the deal
  • Ability to repay debt
  • Ability to provide return on investment
  • Potential to grow
  • Value of name and location
  • Value of the assets and capacity of the business for growth
  • Business model: manufacturing, service industry, retail, etc.
  • Level of personal involvement of the seller with the business
  • Uniqueness in market and frequency of finding similar businesses
  • Types of customers, diversity and longevity
  • Cost of replicating the business
  • Cost of gaining equivalent market share
  • Match for income, lifestyle goals of new owner
  • Amount of learning involved for new owner
  • Vulnerability to competition
  • Vulnerability to recession, business climate change

At CapForge, unlike with many other business sales offices, we work diligently to price each business fairly the first time out, rather than aiming high and either hoping for a sucker or planning to be negotiated down. Therefore, we are very good at determining a price we believe will come very close to what the actual market will bring.

If you need help evaluating a business or the right price to offer, we can help you understand the factors involved and the reason a price you see may be too high, just right, or a complete steal!

If you are interested in having us work with you in buying a San Diego business for sale, give us a call and let's see if we can work together to make it happen.