The most frequent question I hear from new contacts is, what is my business worth? In determining the fair market value of business, many factors must be considered. While we’ve described valuation considerations in past articles, the comment, “I’ve got to have this much for my business” is not a relevant factor for determining fair value. It may be worth considering in as much as a threshold for a seller’s willingness to sell, but not the careful consideration buyers should give to submitting a fair and reasonable offer. To think of it another way, nobody would seriously consider purchasing a car, home, or any other costly asset if the “must have” price for the asset was higher than the market value. The buyer would simply keep looking.

Often in the optical industry, small business owners started and grew their businesses to their present size. They’ve invested more than just time and money to nurture and build a life business. They frequently have a fond emotional connection to customers, employees, and vendors with whom they share memories. In determining valuation and best prospects for a sale, a business owner must look past personal feelings about the business and understand its current and future financial and operational prospects rather than relying on a “must have” amount. Memories hold a lot of value, and that’s why they can’t be bought or sold.

— Jason A. Meyer, SVP, HPC Puckett & Company