Selling Your Business The Right Way: Establish Your Business’ Value

By Service Excellence Training Selling Your Business The Right Way: Establish Your Business’ Value
Selling Your Business part 2

Many small business owners only start to consider selling their business when they get an unexpected offer for it. Suddenly, the idea is churning in your head, and you wonder what you might sell your business for someday.

You may know what amount you’d like to get when you sell your company, but you likely don’t know the actual value that investors are willing to pay for your business. Fewer than 5% of all service contractors have ever had their business evaluated by an independent third party. Without an independent evaluation, you truly don’t know what your business is worth. This means that you’re vulnerable to undervaluing or overvaluing your assets when it comes to selling your business.


Book your consulting call with Todd today to learn more about evaluation!


When it comes to establishing the value of your business, there are essentially three ways you can make it happen:

Self Evaluation

Self-evaluation is the process of the owner determining the purchasing amount of their business themselves. Most owners are not business evaluators, which means there is a high possibility they are going to make some major mistakes when self-evaluating. 

The most common mistake you can make when self-evaluating is overvaluing the purchase price of your business. Overvaluing occurs because of the personal time and energy an owner has put into their business. This time and energy create an emotional attachment to the company, which can be confused for value from the owner’s eyes.

However, a potential buyer isn’t going to value your personal sacrifice. No matter how much the buyer respects your effort and hard work, the buyer values the potential upside of purchasing your business. The buyer is looking for a return on investment. Your pain and sacrifice, unless it has actually increased the value of the business, isn’t worth a premium.

Buyer Evaluation

Always remember: the buyer is looking for the best deal possible. This is what smart buyers do. If you are putting your business in the marketplace to be purchased, then you are putting yourself in the sight of smart and sophisticated buyers. These buyers will do their research on your company, and they will determine what fair market value is to them. They are going to try to negotiate to purchase your business below that value. 

Offering a low amount does not make buyers unethical — it makes them smart. It’s what you should do if you’re looking to buy a business. It’s also why if you want to go to the negotiating table well-armed, then you had better do an independent evaluation of your business in advance of the offer. 

Independent Evaluation

An independent evaluation of your business is done by a third party. It’s a detailed examination and breakdown of your business’s current value. A good evaluation should be unbiased. It should state the current value of the company to the open marketplace. This number serves as a baseline for the owner and the buyer. It’s not a guaranteed number that you’ll receive when you sell your business. However, it is a benchmark that you can trust to be accurate and unbiased by either your own feelings or that of the buyer.

The Most Accurate Evaluation Is Your Best Bet

After you’ve put in all the work to plan an exit strategy for the sale of your business, don’t waste your effort by skipping this step. You need to become one of the smart, strategic owners who get the most accurate information before considering a sale. Todd Liles can help you do that. You’re the one who has put so much work and money into your business, why not get an accurate evaluation of its worth? You may be surprised by the assessment results, but you’ll be informed and ready to progress to the next step of selling your business.

In Part 3 of the Selling Your Business The Right Way series, we discuss the next step: understanding and prioritizing your buyout offers!

Contact Us!

What SETs Us Apart?

Proactive Business Plans

A proactive business is a successful business. That's why our team takes the time to make sure every client has a proactive, not reactive, business plan. Our strategies make your business run more smoothly and profitable.

Proven Results

Our training services help businesses identify and achieve their key performance indicators (KPIs). Whether it's increased revenue or higher satisfaction rates, our methods allow you to see immediate and continued results.

Personalized Training

Our team of experts works hard to make sure your business gets personalized training. We'll work with your team one-on-one or in group settings to set and achieve your business goals. We develop training based on your goals!

Prioritizing People

We believe that people are the most valuable asset. We strive to provide outstanding benefits, life balance, leadership, and support to our team. We believe in helping people reach their greatest level of growth, contribution and satisfaction.

Success Stories

I've increased my sales from $250,000 a year to over $400,00! This really works.

-Scott Putman, Putman Plumbing

Success Stories

Over $2,400,000 in sales my second year after training with SET!

-Chris Yanez, Selling Tech

Success Stories

I sold $18,867 on my first call after SET's Press Play for Sales event series!

-Jake Pettit, Selling Tech

Success Stories

We have been with Service Excellence Training since 2015 and believe it is an integral part (training, coaching, mentoring) to our overall business model.

-Judy Mueller-Hyde, Director of Operations
Hydes HVAC Company Logo

Trusted By

horizontal red and purpler plumbtite logo
142 Cimarron Park Loop, Ste E, Buda, TX 78610
Join our newsletter
© 2024 Service Excellence. All Rights Reserved
Website by Leadhub