April 2, 2019

The Seven Deadly Sins Of Business Valuation

PRIDE You think your business is worth a lot of money because you have had it for 15 years. Unfortunately it doesn’t matter how long you’ve run your business. Its the value proposition that you’re offering to the buyer that matters. You could have a business that you ran for 20 years and it could be worth nothing or you could have just started up a business and it could be worth millions. Business owners think that because they put 20 years into their business they deserve to be rewarded. No one cares how long you’ve been in the business GREED You think your business is worth the amount of money you need to retire. The problem is that it […]
January 22, 2019

Importance of Business Valuation

Before you’re ready to sell your company, you’ll want to determine its fair market value as a starting point for negotiations. Of course, obtaining a reasonably precise value for your business is often a complicated and time-consuming task. Accurate appraisals must weigh a variety of factors and incorporate numerous assumptions. The more precise the underlying numbers and suppositions, the more likely the appraiser’s determination of fair market value will reflect what a willing buyer would actually pay. Here are two questions an appraisal should address. How does your business compare? If you’re operating a service business, your valuation will differ – often substantially – from a company involved in light manufacturing or retail. Buyers will expect a reasonable return on […]
July 25, 2017

Understanding Business Valuation

There are many reasons why a business owner would want to be able to set a determined value for the business. This is achieved through a process called business valuation. The individual procedures and prescribed processes that go into a business valuation are complex, but the following information can help you gain a general idea of what it involves. If you’re a small business owner, you don’t have to worry about conducting a business valuation, but it’s beneficial and reassuring to understand the basic outline of the process in the event that you would consider selling your business in the future or purchasing another business. The goal of a business valuation is to arrive at an estimate of the economic […]