Business Valuations
What is the value of your businesss? We use standard industry practices and multiple resources to calculate the value of each business using 3 different methods. Under ideal circumstances, all 3 valuations will result in similar values. But in some cases, they are widely apart. In that situation, we would try to understand why. It may be standard for the industry, but it is more likely something inherit in the business.
Let's say 2 businesses are identical in all aspects but one charges more and makes a higher gross profit. They both have the same gross revenue. Valuations based on gross revenue alone would yield similar valuations. However, one company is making 15% net income and the other only makes 10% net income. The first company is by far more valuable -- and attractive to a prospective buyer.
Let's say 2 businesses are identical in all aspects but one charges more and makes a higher gross profit. They both have the same gross revenue. Valuations based on gross revenue alone would yield similar valuations. However, one company is making 15% net income and the other only makes 10% net income. The first company is by far more valuable -- and attractive to a prospective buyer.
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There is more to the valuation than just a few numbers on the income statements. What if one company had a strategic market position where every resident in town could only obtain a certain service from one company. The town was expanding and building permits were up by 40% over the previous year. A buyer looking at this business and another with similar financial results would likely be more attracted to the business that is growing and has documented prospects for the coming year.
So, our process is to look at the financials, but also understand the business. Is your business absentee-owned? Do you own the building? If so, do you pay yourself rent? Is that rent more or less than market rent? Do you have a disruptive marketing impact on your market? We'll keep going, but the more we can understand the business, the more confident you can be in the information we'll present to you. We've valued hundreds of businesses and will sell them close to the valued price. We don't suggest inflating the price just so you can reduce it later. Put a fair price on it and prospective buyers will buy it.
Call us today at 317-768-0234 for your Free Business Valuation or fill out the form above.
So, our process is to look at the financials, but also understand the business. Is your business absentee-owned? Do you own the building? If so, do you pay yourself rent? Is that rent more or less than market rent? Do you have a disruptive marketing impact on your market? We'll keep going, but the more we can understand the business, the more confident you can be in the information we'll present to you. We've valued hundreds of businesses and will sell them close to the valued price. We don't suggest inflating the price just so you can reduce it later. Put a fair price on it and prospective buyers will buy it.
Call us today at 317-768-0234 for your Free Business Valuation or fill out the form above.
