Know the Number Before You Make a Move
Owners start thinking about a sale for different reasons. One wants to retire, another is tired of seven day weeks, and a third just fielded an offer nobody around the table could judge.
Each of them needs the same first fact: what a stranger with cash and no history with the company would pay. Ask too much and the listing sits. Ask too little and the buyer keeps the difference.
A broker who sells companies across Philadelphia and the surrounding counties can give you a realistic range and show what pushes it up or down.
Earnings Set the Price
Buyers pay for profit they can prove, not for sales volume. A company that rings up seven million dollars a year can still sell for around two million if margins are thin.
When the owner works in the business, brokers look at the cash one working owner could take home. Larger firms with managers in place are priced on earnings after a market salary for the owner.
Most Main Street companies change hands at about two to three times that cash flow. Where yours lands depends on risk, such as how much rests on you and how much revenue sits with a few customers.
Our straight answer on how buyers read your books walks through the math.
A Region Built on Neighborhood Trades
Philadelphia runs on rowhouse renovation, corner restaurants, hospitals and universities, and a long chain of suppliers that feed them. Suburban Montgomery, Delaware, Chester and Bucks counties add professional services and light industrial shops.
Each kind of company draws a different buyer. Our trades and shops pages explain what each buyer looks at first.
What Buyers Ask First
Serious buyers screen fast. They want to know how much one working owner takes home, how many customers share the revenue, how long the lease runs and how many employees would stay.
They also ask for three to five years of financials and a believable reason for the sale. Retirement, health or a new chapter sounds right. Trouble in the business raises doubts.
Having those answers ready before the first meeting makes your company look organized and keeps the negotiation on your terms.
Why Owners Hire a Broker
A broker reaches buyers you could not find alone and keeps your name private until a buyer has been screened. A broker also stands between you and a professional acquirer who knows the numbers better than most first time sellers.
Most sales that close take seven to nine months. A good broker says so up front and keeps the work moving.
Signs You May Be Ready to Talk
- Profit has held steady for three years or more.
- Your managers can run a week without you.
- No single customer is more than a fifth of your revenue.
- You want a plan, whether you sell this year or in five.
If two or three of these fit, a short call will show where you stand. Companies with about one million dollars in yearly sales or more draw the most buyer interest.
Timing Is Rarely Your Enemy
Owners often wait for a better year before they ask. Market multiples barely move over time, so waiting rarely changes the number, but improving profit and tidying the books can.
The best time to learn your value is before you need to know it.
What Happens to Your Information
Your answers go to one brokerage partner, and nothing about your company reaches a buyer without your approval. We explain our role in the broker referral disclosure.