How to Price a Small Business to Sell

Are you contemplating how to price your small business to sell?

Here is a Roundup of Pricing Resources & How to Calculate the Value of Your Business:

To help you price your business, I’ve compiled several helpful articles that discuss how to price a small business. The first two resources are specific to selling a hair or beauty salon; however, they’re still relevant for almost any type of small business, particularly ones that deal with cash. The third, an excellent and thorough article, speaks to all industries. The fourth takes a high-level educational approach and discusses the importance of deal structure.

[Post Update] I’m always on the lookout for useful information regarding pricing a small business. Since originally writing this post, I’ve added two more resources that are particularly useful.

I’m not advocating you become an expert at pricing your business. Rather, the more you understand about the pricing process, the more confident you’ll feel once your business is listed for sale. You’ve spent a great deal of time building your business. The following will help you set your expectations.

Once you’ve decided your initial sales price, I strongly encourage you to seek a professional third-party (neutral) second opinion, and incorporate this advice into your final selling price. It could be your CPA, financial advisor, business broker, or if you have a very small budget, then a friend of a friend who’d be happy to look at your numbers and provide you a quick second opinion.

Too often, I’ve seen small business owners try to price their business on their own, only to miss key factors, ultimately slowing down your sales cycle.

Here are 4 free small business pricing resources:

How to Value a Beauty Salon — What I like about this article is that it’s very straightforward and salon-specific.

Time to Sell? Setting a Price for Your Cash Business — Very easy to follow information.

[RELATED eBook] FAREWELL SCISSORS: Insights & Strategies that Help Hair Salons Sell Quickly

What’s Your Right Asking PriceHow to Sell a Hair Salon — This article does an excellent job explaining how to prepare a Seller’s Discretionary Income Statement. As a side note, when I sold my technology business several years ago, out of all the financial pieces a buyer wants to see, I spent the most amount of my time preparing this particular piece of financial information.

Valuing a Small Business for Sale — This article talks about the importance of deal structure and how it impacts your price.

[2 Additional Pricing Resources]

BizBuySell Insights Report — This report summaries the amount of U. S. businesses listed for sale, their average asking price, what actually sold and the median sale price. Use it for sale-price benchmarking purposes.

Why Many Small Businesses Cannot Be Sold — A great article that talks about the key reasons why most business owners will never be able to sell their business, and steps to rectify the situation.

One final thought: If you’re not prepared to sell your business immediately, then take the time now to walk yourself through what you could possibly get for a selling price. The answer(s) will redirect you to more profitable day-to-day business decisions.

If you have found or know of other helpful articles regarding pricing a small business, would you please email me the link so that I may review it. Thanks in advance for your assistance.


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Thank you for commenting and sharing!

Here’s to your sales success and next endeavor,