The All-Important Business Valuation
Business valuations are a way to figure out how much your business is worth so that you can make informed decisions about what to do. If you are thinking about selling your company, for example, business valuation professionals at Pro Business Plans will assess the current value of the company based on its intangible assets and tangible assets.
That is just the basics of what business valuations are. If you want to get into the nitty-gritty, however, there are a lot more factors that affect your company’s worthiness for sale or purchase. For example:
How much do others think it is worth? This will depend on how well they know about your company and its products, as well as their own financial situation. The higher the perceived value – even if only in one person’s opinion – the greater chance it has of being sold at an above-average price point.
What does comparable companies sell for? You may not have any clue who owns businesses similar to yours because they’re smaller than yours; but someone else might be able to give you an estimate. What other companies have sold for in the past year or two? And what about those not similar to yours but within your industry, like a competitor that has recently been bought out by another business?
How much do I want it to sell for? Not as simple as just come up with a number and throwing it into the equation! You must also consider how willing you are to accept offers deemed too low – this is where no-compromise negotiating skills will be needed.
What costs am I facing when selling my company? If there’s one thing holding back on decision-making more than anything else, then this should be it; because if you can’t afford to pay all of these off before getting rid of your company, you will be taking on a lot of debt when it’s time to sign the papers.…