Start With What a Buyer Would Actually Pay
Owners decide to sell for plenty of reasons. Retirement, a partner who wants out, a health scare, or an unexpected offer that nobody knew how to judge.
Every one of them needs the same first number: what an outside buyer would pay today. Aim too high and the listing goes stale. Aim too low and the buyer pockets the gap.
A broker who sells companies in eastern Massachusetts can show you a realistic range and tell you which parts of your business pull it up or down.
How Buyers Put a Price on a Company
Buyers pay for profit they can prove, not for sales volume. A company with seven million dollars in revenue can still sell for around two million if margins are thin.
For an owner who works in the business, brokers use seller's discretionary earnings, meaning what one working owner can take home. Bigger firms with real managers are priced on EBITDA.
Most Main Street companies trade at roughly two to three times that cash flow figure. Where yours lands depends on risk: how much rests on you, how many customers you depend on and how clean the records are.
Our note on the adjustments buyers accept shows how owners restate their numbers before a sale.
A Region Full of Different Buyers
Greater Boston mixes life sciences and lab suppliers in Cambridge, software and engineering along Route 128, shipping and marine work on the harbor, and hundreds of restaurants, contractors and service shops in every neighborhood and suburb.
That variety helps sellers. A lab services firm draws a different buyer than a snow removal company or a plumbing outfit. See the industry valuation pages for what each type of buyer checks first.
Signs You May Be Ready to Sell
- Yearly sales are around a million dollars or more
- Your tax returns and your internal books agree
- The company runs for a week without you
- No one customer is a large slice of revenue
- Your lease is in writing, or you own the building
If several of those are missing, you now know what to fix first. A broker can tell you which gaps cost real money and which ones buyers shrug off.
How Long a Sale Takes
Plan on seven to nine months from signing with a broker to closing. Six months is fast, and many owners feel the process drags even when it moves at a normal pace.
Keep the company performing the whole way. A slump worries buyers, and a sudden spike right before listing makes them suspicious. Steady results sell best.
Financing changes the clock too. Read how earnouts and seller notes can speed up or slow down a closing.
What a Broker Does That You Cannot
You will probably sell one company. Many buyers have bought several and know the terms by heart. A broker evens that out, screens buyers, protects confidentiality and builds competition for your company.
Some owners balk at the fee. Taxes on a sale are usually the bigger cost, and a broker earns the fee back through a higher price, a faster close or a deal that survives due diligence.
A broker also keeps you from signing a letter of intent with a buyer who called you directly. Those offers often come from people hoping for a discount.
Your Details Stay Private
We send your answers to one brokerage partner, which may pay us a referral fee. Nothing about your company reaches buyers without your approval, and the first call carries no obligation.