Price Vs. Salability
When discussing valuation about your business it may be helpful to separate to distinct components of the business in your mind: price and salability. While the two seem highly dependent qualities, they can take on very independent functions in a business sale. Price is the value of the business using accepted valuation models: generally the discounted value of future cash flows that the business is expected to generate an owner. Salability is the general "appeal" of the business to a generic buyer market.
In our consumer/commodity driven society, it's widely accepted that price adjustments can counter most salability issues of a given item for sale. Unfortunately, there are many businesses that are unsalable--no matter what the price. That's a hard fact for businesses owners to accept and good brokers should be forthright about the salability of a business. It's not just enough to price the business on hard numbers--helping the business owner understand the factors that affect salability will better prepare the sellers expectations of a successful transaction.
A good exercise is to put yourself in a buyer's shoes. What would you find appealing about the business? What are issues or problems that might affect your opinion? It can be difficult to be objective about your own business, but if you're serious about selling your business you'll need to realistic about it's salability.
