What is Broker's Opinion of Value (BOV)?
The Short Answer
Broker's Opinion of Value (BOV) explained simply
A Broker's Opinion of Value (BOV) is what it sounds like: a broker's take on what your business might sell for. It's not a formal appraisal. Think of it as an educated guess. Brokers use their experience with similar businesses and current market trends to come up with a number. It's a starting point, not a guarantee.
Real-World Example
The Coffee Shop BOV
Let's say a broker looks at a coffee shop. They know similar coffee shops in the area sold for 3 times their annual profit. The coffee shop makes $100,000 in profit a year. The broker might give a BOV of $300,000. This is a quick estimate based on market multiples.
Why this matters
A BOV helps you get a quick idea of your business's value without paying for a full appraisal. It's useful for initial planning. It helps you decide if selling now makes sense. It also helps set realistic expectations for a sale price.
A BOV is a good starting point, but it's not a substitute for a detailed valuation. Use it to guide your initial thoughts, but always get a more formal valuation before making big decisions.
A BOV is a good starting point, but it's not a substitute for a detailed valuation. Use it to guide your initial thoughts, but always get a more formal valuation before making big decisions.
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