After 27 years, how can I put a price tag on my company?

I am a commercial loan broker who is 27 years in business and I have a large base of customers that I have arranged financing for. How can I sell my business when all I have is a database of business customers that I have done financing for? After 27 years, how can I even put a price tag on my company? I don't know how to even evaluate what that is worth.

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Presumably, the only thing of significant value you would be selling is your book of business and contact database. There are a myriad of formulae for calculating a business's value, usually all based on some multiple of earnings (anywhere from 1-10 times depending on size and longevity), or, for smaller businesses, a much smaller multiple of revenue, or both. The first step should be to consult a business broker (I am not one), who should be able to give you a complimentary ballpark figure or you can pay for a full valuation. Beyond the value, there are a lot of Ts to be crossed and Is to be dotted, which will require guidance from a business attorney, CPA, and others. http://www.bizbuysell.com is a commonly used site for listing and buying businesses, which might give you some valuation ideas for your company.

Thank you so much for your timely answer to my question. I'll take your advice and consult with a business broker. Have a great week!

2

There are three broad approaches to valuing a business: asset based approaches, earnings based approaches, and market based approaches. You should consult a valuation firm, or a business broker who knows how to value businesses. Not all business brokers know how to value businesses. If the broker gives you a rule of thumb, or say that your type of business sells for X times earnings or Z times Revenue, move on to another broker who does know how to value a business.

Thank you again for your valuable insight and expertise in answering my question. I sure do appreciate it.

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