With more SMBs turning to online tools for business valuations, BizBuySell offers owners the ability to calculate the value of their company through a set of valuation filters.
Every year, nearly 300,000 small businesses shut their doors. In
light of today's volatile economic climate, there are more than a few
business owners out there considering how long they want to struggle
In many cases, small to medium-size business (SMB) owners are
curious to know how much money they could get if they sold their
companies. A new online valuation tool from BizBuySell, the nation's
largest online business-for-sale marketplace, helps owners determine
what their business is worth.
In an era where SAAS (software-as-a-service) offerings are letting you do
everything from execute a direct mail campaign to processing an SMB
payroll, the flesh-and-blood consultants of the past have been replaced
by online services such as BizBuySell's online service.
The company's recently released Valuation Report is an online tool
that lets SMB owners mine business-for-sale data from more than 32,000 sold
businesses and 50,000 listings to assess the value of a business. The
data used to generate valuations spans more than 80 different business
categories and includes comparable-sale transactions across the United States
and Canada. A keyword search allows users to further enhance their
BizBuySell Valuation Report pricing, which starts at $19.95, is
based on the number of sold comparables available for an individual
report, which is specified prior to purchasing. The pricing is capped
at $59.95. Users are given a 30-day access window to view report data.
The company claims approximately 800 new comparables are added into the
BizBuySell database on a monthly basis.
SMB owners can narrow down the businesses that are used to generate
a valuation by applying filters on business type, geographic location,
income and cash flow levels, date sold, and other attributes. For
example, the owner of a Chicago-based Web development firm can generate
the business valuation estimate based on comparables of similar firms
sold in the surrounding area.
BizBuySell General Manager Mike Handelsman warns the tool can become
addictive. "The more you interact with the report and narrow your
selection criteria, the more precise the asking price." However, some
business brokers think that while the BizBuySell Valuation Report is a
great starting point, it may not give as accurate of a valuation as a
trained valuation consultant.
Domenic Rinaldi, owner of business broker Chicagoland Sunbelt, finds
the tool to be of great help to SMB owners, but cautions the
online service can't yet replace living, breathing consultants. "It's a
great way to get an initial sense for what your business is worth,
without having to make a material investment," says Rinaldi. "However,
we would still recommend that a selling business engage a valuation
consultant to get a more precise estimate of what their company is
worth. An online tool can only get you so far."
Handelman says he agrees. "We're not in the business of replacing
valuation consultants. Our intention is simply to supplement those
services and give folks an affordable way to find out approximately
what their companies are worth."