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777 E. Thomas Rd,
Suite 100
Phoenix, AZ 85014
602 888-6000

Buying a Business

How to Determine What Your Business is Worth:

How to Determine What Your Business is Worth:

There are numerous ways to value a business, some are better than others.

Here are two quick ways to get yourself in the “ball park”.

    • Look at the value of the business's assets.
    • What equipment? What inventory? What Fixtures?, etc.
    • After all, you'd have to buy all this stuff if you were starting this business from scratch, so what is it worth in place and making money.
    • Another way is to value the business is a Sellers Discretionary Cash Flow (SDCF). Businesses are often valued at a multiple of their annual SDCF.
    • The multiple used varies between industries - we can help you determine the best multiple for your industry.
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What is SCDF? and How Does it Relate to My Value?

Sellers Discretionary Cash Flow (SDCF). Businesses are often valued at a multiple of their annual SDCF.

What is SCDF? and How Does it Relate to My Value?

  1. We help you analyze your books and determine what is an appropriate ADD-BACK.
  2. We assist in determining your SCDF.
  3. We help you determine your MULTIPLE of SCDF customary for your industry
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Buying a Business - There are a substantial number of steps involved and much to consider, especially for anyone who has never previously purchased a business before. Buying a business is a major decision and investment. With much at stake, it is crucial that you prepare yourself properly and educate yourself for the journey and take the necessary steps to be certain that you make all of the right decisions along the way.

Nine out of ten people who begin the search to buy a business, never complete a transaction. This is according to industry statistics. Perhaps the biggest reason for this dismal statistic is that most people simply do not realize how much is involved. Part of the challenge is that most are first time buyers. Faced with having to make one crucial decision after another, they become overwhelmed and frustrated and soon they abort the project. According to Richard Parker, President of The Business For Sale Buyer Resource Center™ and author of How To Buy A Good Business At A Great Price©, The average buyer spends 18 months looking and then gives up. However, there's no reason why you shouldn't be able to complete the process in six months. If you're working full-time, you will have to be disciplined in your search efforts. If buying a business is a goal you've set for this year, then block off at least ten hours per week to devote to this project.