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.
Business people often disagree about business valuation results. Given the amount of money at stake, it is not surprising that the parties tend to view what a business is worth from different points of view. Consider these common situations: Business sale The business seller wants to maximize the selling price and looks to support a higher business value.… Continue Reading
Payback period is the time it takes to recover your original investment. If you are buying a small business, that’s your down payment money. You can use ValuAdder Deal Check tool to factor in your payback period. Here’s how: 1. Your purchase price and terms Enter the purchase price and terms you have in mind. Next, specify the compensation… Continue Reading
Does professional practice valuation differ from other business appraisals? Consider this: Professional practices come in many types: dental and medical practices, law and accounting firms, architecture and engineering consulting companies, individual and business professional consulting firms. While a professional practice may look like a service business, there are key differences to bear in mind that… Continue Reading
Why do you need income statement and balance sheet adjustments before valuing a company? Because the “cost-basis” accounting statements such as the company’s Income Statement and Balance Sheet require adjustments before you can use them in business valuation. Your goal here is to demonstrate the business earning power and economic value of its asset base.… Continue Reading
Small business value is driven by its earning power It will come as no surprise to you that the value of a small business depends on how much money it makes. More so than the market comparisons or the size of the business asset base, its ability to generate adequate income for its owners defines what it’s… Continue Reading
One of the greatest strengths of ValuAdder is its flexibility. You will notice that ValuAdder offers you a number of well-known business valuation and deal structuring tools. With all the tools and business valuation methods available to you, you can make the choices that best fit your particular business valuation, business sale or purchase situation.… Continue Reading
With all the business valuation methods available, you may wonder which ones work best for valuing a start-up business. First, let’s consider the special challenges faced by a young business that affect what it is worth. Conflicting requirements for start-up valuation Unlike an established business, startup companies have little history of financial performance. Frequently a young… Continue Reading
As you know, business valuation depends on a number of key assumptions. Most importantly, your income forecasts for the business influence your valuation results. Your business plan may include a number of such forecasts. Typically, business people have a set of income and expense projections. Because there is no guarantee how the business will perform… Continue Reading
You will hear this advice time and again – if you need to get a solid business valuation, roll up your sleeves and use the Discounted Cash Flow method. Used by professionals to value businesses small and large, this income-based business valuation method has become the de facto standard for precise business valuation. When you use this powerful… Continue Reading
You may have heard that business selling price is just one part of the business purchase or sale decision. The terms of sale and business financial requirements are at least as important to a successful deal. Business acquisition financing: debt and equity Small business acquisitions are financed using some blend of debt and equity capital,… Continue Reading