Most experts we talked to said that sellers set the asking price for their business too high. Michael Karu, a CPA at Levine, Jacobs & Company, explains that this is because “sellers often think they are the only ones who can properly run their businesses.” They place too much value on the amount of time and effort that they have put into the business even if the financials don’t support such a high valuation. Sellers should come to the table with a fair understanding of the business’ past successes and failures and reasonable expectations about the price.
Thinking of selling a business? Our client, Michael H. Karu, CPA/CFF, of Levine, Jacobs & Company, LLC, was featured in a recent article on business valuation published on FitSmallBusiness.com. Here’s an excerpt featuring a quote from Michael: