In order to answer it, think about the owner’s add-backs that are often recurring items.
Multiply the free cash flow by the multiples, and you have your electrical valuation. There are several other things to consider. The buyer is purchasing anything needed to run the business, such as trucks or other equipment. Also, the buyer will purchase this electrical business debt free, so you will have to pay off any debts before the sale. Lastly, there will need to be an agreed upon amount of working capital left in the business at closing.
Understand that there are many fees involved in the sale of a business, and you can expect to net 70-75% of the sale price.
The valuation of your electrical company involves many variables, but once you understand its true worth you can move forward with making the best possible sales deal. Although there are so many things to consider, when it comes time to figure out how to value an electrical business, a little help would go a long way.
At Brentwood Growth, we have a wide variety of investment partners waiting to pair with you, in order to get a high electrical business valuation.
Contact us today to investigate our seller side loyalty and ability to close the deal for you.