Business Appraisal
Most business appraisals are done based on Cash Flow, Income Statements, and Balance Sheets. Additional items such as projected growth and special items (page rank, etc) are supplemental.
Most appraisers will want 3 years of financials, probably prepared by an accountant. If it's a sale for more than half million, they'll probably want certified financials from a CPA.
Once they use the financials to derive a base number, then they will add or subtract based on the items unique to your business and industry.
Typically the buyer does one appraisal (which invariably is low) and the seller does one appraisal (which invariably is high). Then you negotiate. If your appraisal is 6 million and the buyer's appraisal is only 1 million, then you've got a lot of work ahead of you to close the deal. If you're both relatively close, then you should be able to close sooner/more easily.
More important that appraisals is having multiple buyers. This is often the only thing that moves deals forward in a fashion favorable to the seller. For small businesses, it is very hard to sell them for anything approaching multiple found on public stocks. 2 to 4 time Net Income or 1 or 2 times sales are fairly typical. Small businesses are very risky assets to aquire and extremely illiquid.
The appraisal is just a number and means nothing in and of itself. Your business on only worth what the buyer will actually pay for it.
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