Business valuation tips, updates and advice. Pick up a few suggestions on how to value a business. Feel free to browse the contents or share your thoughts by leaving a comment.
Companies large and small often realize that they cannot be all things to all people. A business may excel at product development but have little experience in providing specialized services to its customers. A company may have an established position in a regional market place, but lack resources to enter a larger national or international… Continue Reading
Construction companies are frequent business acquisition targets. The volume of business sales is largely due to the industry size – there are over 346,000 firms in the single-family housing construction alone, classified under SIC 1521 and NAICS 235510. While this construction industry segment generates over $196 billion in annual sales, the average construction company is… Continue Reading
If you are buying a business or selling your business, estimating the business selling price by market comparison is a good idea. Recent business sales in your industry offer an excellent way to develop your asking price or check your offer price and terms. A number of business pricing multiples to choose from As we… Continue Reading
If you need a bullet-proof way to show what your business is worth, compare it to similar businesses that sold recently. In fact, such business market value comparisons are widely used by business people and professional business appraisers. So much so, that they deserve an official name: Comparative Transaction business valuation method. Market comps and business fair… Continue Reading
Perhaps the most misunderstood part of valuing a business is that business valuation results may differ depending on the assumptions you make, namely: Who needs to know what the business is worth? What are the circumstances surrounding your company valuation? Business appraisers use the formal term business value standard to address this situation. You have… Continue Reading
Even if you keep your company’s financial records in accordance with the Generally Accepted Accounting Principles (GAAP), the value of key intangible assets may not be clear. Unless, that is, these assets were acquired as part of another business purchase. In fact, GAAP rules state that business owners can’t record the value of internally developed… Continue Reading
If you are looking to appraise a business, you have two basic choices: Hiring a professional business appraiser. Doing your business appraisal yourself. Obviously, professional help comes at a price. But what can you expect to spend to get your business appraised? Business appraisers charge by the hour, with average hourly fees being around $300… Continue Reading
When it comes to valuing a business, the business value number you get is always in today’s dollars. In other words, all business appraisals are done in the present. Yet the key goal of business valuation is to assess the company’s earning potential and risk going forward. In this sense, your business appraisal is always… Continue Reading
Most business people expect that an established business is worth more than its asset base. This extra value is known as business goodwill. In other words, you can determine your business value as the sum of its assets plus business goodwill. The accepted way to estimate the value of business goodwill is to capitalize the… Continue Reading
If you plan to buy or sell an online business, you will be glad to know that the market for privately owned Web based companies is alive and well. In addition to many individual business buyers, Internet businesses often attract larger players – corporate buyers and private equity investors. Such business buyers can pay a premium… Continue Reading
Insurance brokerage is a growing business. In the US, for example, there are nearly 220,000 insurance brokerage firms. The industry employs some 1,232,000 people and generates total annual sales of over $355 billion. Most insurance agencies are small businesses with an average staff of 6 and annual revenues of around $1.8 million. These businesses continue… Continue Reading
Need a business valuation for a bar, pub or a microbrewery? Consider this: Over 50,000 bars, pubs, microbreweries and night clubs compete in the US alone. These businesses tend to generate good cash flow and attract loyal customer following, especially if the bar concept focuses on a particular demographic. With health benefits of moderate wine… Continue Reading
While business valuation is hardly black magic, 3 common myths do need dispelling: Myth 1: There is only one way to appraise a business. Not so. In fact, there are three ways, known as approaches, to determine the value of a business. Each has strengths and drawbacks. That’s why a well-prepared business appraisal uses a number… Continue Reading
Hospitality industry continues to grow at a rapid pace. In addition to the major markets including business and luxury hotels, motels and country inns, recent growth has been fueled by the addition of privately owned establishments that tend to focus on lucrative niche markets. These include specialty bed and breakfasts, destination location inns, fitness oriented… Continue Reading
Brand names and trademarks are an important type of business intangible assets. Most successful businesses have these valuable assets in one form or another. Think of business trade names or product and service trademarks used to distinguish business offerings in the competitive market place. As a business builds customer following, the value of its brand names… Continue Reading