BizBuySell Offers Businesses Online Valuation Tool

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 on.

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from execute a direct mail campaign to processing an SMB payroll, the flesh-and-blood consultants of the past have been replaced by online services such as BizBuySell's online service.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 business selections.

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."