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business is worth what someone will pay for it. While this may sound obvious, it is important for anyone considering selling their business to understand that purchasers are becoming more and more sophisticated in how they value them. There is an increasing number of acquisition opportunities for purchasers and they expect sellers to be reasonable in their price expectations otherwise they will move on to something that gives them better value for money.Purchasers will not overpay but there is a balance that will give the seller a good return for the business they have created and makes sense of the return on investment for the purchaser. The problem of unrealistic price expectations is common in a number of countries. In 2002 we were asked to sell a UK exhibition business. The company was making a pre-tax profi t of £450,000 (US$707,980) but the owner wanted £10m, representing an impressive multiple of 22. His rationale was that he had been running the company for 10 years and wanted £1m for each year. Unsurprisingly, no-one was interested and the business remained unsold. Competition over the years saw the business decline and it no longer runs today. If the owner had been sensible he might have retired with £3m rather than nothing at all. More recently the owner of a business in the USA decided to sell and put a price tag of $15m on VALUING YOUR BUSINESSIssue 8 | 2011 www.20exhibition-world.netWHAT IS YOUR EXHIBITION BUSINESS WORTH?STEVE MONNINGTON, MD OF EXHIBITION ACQUISITION SPECIALIST MAYFIELD MEDIA STRATEGIES, LOOKS AT THE FACTORS THAT AFFECT THE VALUE OF YOUR BUSINESS AHEAD OF A POTENTIAL SALEhis company. He had calculated that this was the amount of money he needed to retire with. The pre-tax profi t of the company is $1.1m. The business remains unsold.When an entrepreneur is selling their business, particularly when they are retiring, it becomes a very emotional process. This is in stark contrast to the spreadsheet-driven analytical approach that most purchasers take. The purchaser is primarily interested in the future whereas the seller is looking at his achievements in the past. Maximising the valuationSometimes it's hard for the seller to accept that a lot of what has gone before counts for nothing. The number of years the business has been established, the amount of hard work put in during these years and the profi t levels achieved in the past are of no relevance to the purchaser unless they underpin the strength of the brand, market leadership and future growth.Although there are many factors that will affect the valuation of a business both positively and negatively, there are also a number of positive steps that a seller can take to maximise the price they achieve. The easiest step to take is to run a formal sale process. Most organisers have been approached by companies interested in buying their business and it is very easy to get drawn into a one-to-one discussion. However there are two major downsides for the