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Questions & Answers
Q: Does this model allow one to determine the value of a business you would like to sell; i.e., the suggested selling price range?
A: Yes, this is one of the things it is designed for (as well as buying). When you input relative indicators a forecast is generated. From this a valuation range is determined. If you are selling you should approach it from a generic buyers perspective but use your industry/business knowledge assist in developing the relative indicators. Once you have a valuation range use the valuation model to substantiate your selling price to the potential purchaser, also considering an individual purchaser there maybe areas where they can add additional value (ie the business is worth more to them). For External Earnings it is probably best to use an indicative value for the type of person that would consider buying your business (possibly someone like yourself?). However keep in mind that particularly if you have a lifestyle business the buyer may consider a smaller salary acceptable than they may achieve otherwise.
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