Proper pricing is one of the most important factors in determining whether a business will sell or not. Proper pricing accounts for the true economic performance of the business, which allows the seller to fully benefit from the sale, while not overpricing the business, which will ensure that real buyers are able to benefit fairly. Proper pricing of a business for sale is achieved by working with professional business brokers and third-party valuation firms.

• Buyers are skeptical about the information that business owners provide. Buyers are also skeptical of information provided by brokers. This skepticism is healthy and natural. To help minimize the buyer's concerns and to reduce the concern about conflicting interests of brokers, third-party firms have stepped in to provide a more objective analysis of the business. 
• There are many ways to price a business. The most appropriate way to price a business is to employ a 'justification for purchase' price test. This method provides the buyer and seller an objective standard to determine the reasonableness of the suggested purchase price. In short, if the buyer can receive a fair return on investment for the amount paid as a down payment, then the business is priced fairly. BBN Affiliate Brokers, including Platinum Partners Group are trained to help buyers and sellers understand how the proper price provides a fair return on investment.  
• Competent business brokers ordinarily have professional relationships with third-party valuation firms.  Platinum Partners Group works with RWS, an experienced valuation firm certified to help you "recast" your financial statements.  RWS provides valuation services in 50 states and Canada through a network of Financial Recasting Consultants ().  Through this extensive network, RWS has direct access to market information on a local, regional, and national basis.

What is the difference between "Book Value" and "Fair Market Value" of a business?

• The "Book Value" of a business is an accounting view of the value of the assets of the business. "Book Value" is not an accurate economic perspective. It considers arbitrary deductions from the value of items owned in the business. Therefore, "Book Value" only considers the skewed accounting view of the value of the assets and does not consider the income that the assets generate.
• The "Fair Market Value" considers the true economic value of the assets. There are a number of ways to arrive at the true economic value and most professionals employ several techniques. "Fair Market Value" also considers the fact that some assets generate income for the business. Therefore, "Fair Market Value" is what buyers consider, what banks lend on and what sellers can expect to be paid for.
• Proper Valuation will get the business seller the Fair Market Value at the time of sale and will ensure buyers that they are paying the appropriate price for their new opportunity.  Spending time gathering all the data for a valuation will be worthwhile, as will the nominal fee associated with the reassurance of an independant, properly prepared and complete valuation package for the Sellers business.