Business owners often make the mistake of assuming they can price their company based on the value of similar limo companies for sale. But while it sounds counter intuitive, comparing two limo businesses is like comparing apples and oranges.
A pair of companies may be nearly identical in terms of fleet size, location, and cash flow, yet still have drastically different values due to disparities in intangible assets like history, reputation, and employee experience. If you’re using another company as a benchmark for your chauffeur business, you could be missing out on the one-of-a-kind attributes that make your own business attractive to certain buyers.
It Creates Unrealistic Expectations
When a nearby limo business sells for a particular price within a certain timeframe, competing business owners often assume they can get the same results. Consequently, they may take their business to market with little preparation or professional guidance, only to be sorely disappointed when it doesn’t generate the interest they anticipated.
It may turn out that the competing company you thought was so similar actually had unique attributes, such as an experienced employee base, better customer contracts, or more predicable cash flow. Perhaps the owner spent months or years making reinvestments aimed at increasing value to buyers.
By obtaining a professional valuation from a limo business broker, rather than guessing at value based on other business sales, you’ll have a better understanding of your own potential price – and how to improve that price if it doesn’t meet your expectations.
It Keeps You from Finding the Right Buyer
If you spend all your time comparing your limo business with other companies, you may overlook the characteristics that make your enterprise unique. As a result, you could lose the opportunity to market those characteristics to buyers.
Not all investors are looking for the same things. For instance, if your business offers little opportunity for growth but produces a reliable stream of limo business profits, it may appeal to an investor who is simply looking to buy a job. On the other hand, if your company doesn’t have much cash flow but is located in a rapidly growing market, it may be attractive to another limo business looking to expand.
Just like no two companies are alike, no two buyers are alike. When you identify the factors that set your business apart, you’ll be closer to finding your ideal buyer.
It Prevents You from Closing the Deal
Buyers don’t just want to hear that your business is special – they want proof. Investors expect to see financial statements, tax documents, customer contracts, employee records, and written policies and procedures. If these documents don’t support your projected limo business value, buyers will be suspicious.
Why waste time guessing at value – and risking the chance of overshooting or undershooting? A limo business broker has the industry experience to accurately measure business value and the ingenuity to express that value to your most beneficial buyer.