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A Business Report Card

All, or at least some, of the following should be considered when attempting to place an asking price on a business. Placing an asking price just can't be an emotional issue; or as simple as a seller saying to himself: "I want to be a millionaire, so my asking price will be $1 million." How do the answers to the questions listed below impact or affect the business? Each answer will suggest a plus or minus that will directly influence the asking price.

• Is there a lot of competition?

• Is the product or service exciting?

• What level of expertise or licensing is involved?

• Is the business financeable?

• How volatile is business/customer loyalty?

• How diverse is the customer and/or supplier base?

• How well prepared and reliable are the financial records?

• Is the business dependent on the owner?

• Is the business seasonal?

• How experienced and motivated are the employees?

• Is the work hazardous? Is the work place hazardous? Is the location hazardous?

• Are the length of the lease and the lease terms satisfactory?

• Will the owner stay and train?

• Is too much of the price based on goodwill "Blue Sky"?

• Does the business present an attractive appearance?

Tim Fawcett is a guest writer and a business broker professional

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