How much is my company worth?
Most company owners think their companies are worth more than they actually are. They have put their heart and soul into the firm and would like to be rewarded accordingly. But potential buyers don’t pay anything for emotional value. Instead they focus on assessing the opportunities and risks for the company and calculating an appropriate purchase price based on this.
Of course there are also company owners who undervalue their companies. This primarily happens when owners don’t know exactly how their company’s business and financial figures are performing compared to their competitors.
Experience shows that having unrealistic price expectations can result in the sale falling through. However, having a realistic valuation is also important when companies are passed on to a successor within the family. This helps ensure that all the heirs are treated equally in financial terms, which is usually an important goal when a company is passed on within a family.