Can I price my business higher because I built it from nothing?

Building a business from nothing takes years, and it is natural to want the price to reflect them. A buyer, though, is paying for what the business can deliver to them. This page uses BDC’s published guidance to show what sets the price, why owners can misjudge it, and how your story can still help you if it points to things a buyer can check.

What BDC says sets the price

BDC says a business’s price is fundamentally determined by its perceived value to a potential buyer, often a blend of financial performance, future growth potential and strategic fit. Buyers examine historical revenues, profit margins, cash flow and asset values. BDC says a defensible growth strategy, a diversified customer base and scalable operations significantly boost value, and that lower perceived risk typically equates to higher value. Effort and sacrifice are not on that list.

Why owners can misjudge value

BDC says owners sometimes have a mistaken perception of their company’s value, and that they have a very emotional connection to their business that may cloud their perception. It also says a company’s fair market value is not necessarily the price it will sell for. To get a realistic market-perceived price, BDC recommends engaging a Chartered Business Valuator. A valuation does not decide your asking price, but it shows how far your number sits from the evidence.

What your story can still do

Your years of work can still count where they have produced things BDC links to value: a diversified customer base, documented processes and a strong management team, so the business can operate without you. BDC says that anything not up to par is an opportunity for a buyer to start creeping down the price, while a strong company with strong assets and not much to fix is worth the value you are asking. Whether to price above a valuation and negotiate, or to price at it, is for you and your advisers. See what to do when several offers arrive.