How to Evaluate a Business for Sale in One Hour.

Why your own industry matters most.

Your years in your trade are your real advantage, as chapter 2 established. So you can read an accounts summary there as no outsider can. For example, a firm turning over eight hundred thousand with four staff tells you a lot. You know whether that customer pays late. Also, you know which tasks the owner probably cannot hand over.

How to evaluate a business for sale with one division.

Divide the asking price by the owner earnings, if the listing gives them. That business valuation multiple shows the seller's expectations. Under two and a half is ordinary. However, anything over four wants explaining, and you can ask someone to explain it. In short, three lines per business take under an hour.

Treat the stated reason as a question.

The reason for selling a business is often retirement. Around thirty-eight per cent of sellers say so, and in Canadian data three-quarters do. Research published in 2023 found the stated reason changes what buyers believe and pay. Vague answers about other interests damage the price most. But that study measured perception, not how businesses performed afterwards.