What is the Repricing Process?
Why Is Your Business Repriced After 30 Days?
A lot can happen in 30 days, so we re-evaluate your revenue and expenses each month, to ensure that you’re adequately compensated for your business when it sells.
Our monthly repricing process serves to provide up-to-date and accurate information, to get you the correct value, while also providing buyers with a realistic picture of your present-day financials.
What Is The Point Of Repricing And Why Do We Do It?
Before purchasing a company, a buyer needs to how it performed during the most recent measurement period. For a standard valuation process, we’ve set measurement periods to occur every 30 days, regardless of the business model.
We reprice businesses every 30 days for two reasons:
- Make the profit and loss statements accurate with the latest numbers
- Update your business listing price
Our team works directly with you during the repricing period. This process is relatively quick and simple, but responsiveness is super important. The sooner we get the prices updated then the faster we can sell your business.
How Does It Work?
During repricing, our team looks at your revenue and expenses for the last 30 days.
Here’s how that works:
- Our team reviews your business and determines the information we need from you.
- We request all the information we need via tasks in your Seller Dashboard.
- Then we work on updating all of the P&L + Valuation (based on the latest numbers) and update all screenshots and expenses. Most listings are updated by the middle of the month.
We fill out as much information on our own as we can to relieve you of any extra work.
The faster you respond to any of our inquiries, the faster we can sell your business. We know you are busy, but we encourage you to reply to our team as quickly as you can. We require the most recent updates on your financials in order to keep your business listed for sale on our marketplace.
When Your Business Price Decreases
To calculate the price of your business, we calculate its average net profits over the set pricing period. If your business’ profits start to decline, then your business price could decrease.
When this happens, we work with you to understand what has happened so we can explain to buyers the situation your business is in and what you’re currently doing to manage it. As always, our customer support team is just a message away if you have any questions.
There will also be instances where the last 30 days of earnings have increased compared to the previous 30 days, but the list price still could go down because the average earnings over the whole pricing period have decreased. For example, let’s say a business with a 12-month pricing period earned $10,000 in May and then $15,000 in June this year. If in June of the previous year the business earned $17,000, then the list price could still decrease—even though the business is earning more than in the previous 30 days (May)—because its average net profit over the 12-month pricing period could be down.
Something else to note is that we price your business based on your most recent earnings, which allows you to get maximum value, reflecting your most recent profits. For example, if your business was listed with an 8-month pricing window, on the 9th month, it would extend to a 9-month profit pricing period for the calculation. For example, if the business is listed using an 8-month pricing period we will continue to add 1 month to it every month until we get to 12 months or it’s sold.
We continue following this pricing process, taking the pricing period from vetting and adding one additional month, until we get to 12 months. Then your business valuation becomes based on the trailing 12-month average monthly net profit.
What To Be Aware Of During Our Process
We work to save you from as much of the legwork as possible, and in almost all cases, the entire repricing process is done via email.
During the repricing process, your listing remains active and available on our curated marketplace. Buyers can still view your business and make offers. To ensure that the buyer has the most accurate valuation, our team prioritizes the repricing of your listing, so the seller can make an offer with the most up-to-date information.
Because most of the businesses listed on our marketplace are growing, the repricing process is incredibly beneficial for sellers. If your business is growing, then repricing will net you a higher price for your business.
The One Thing Every Seller Should Know About Our Repricing Process
The first time a price update occurs, it can take some time to figure out what needs to be done, but then updating in the following months is much faster and easier. The majority of our businesses sell within 90 days, so not every business goes through more than one or two updates.
In most cases, the price goes up after repricing, which helps you earn more, while also training buyers to jump on a listing when they see something they like.
If you are interested in getting your business listed on our marketplace, then you can go ahead and start the submission process now.