Repeat your business valuation to track value creation

When you value a business the result is valid for the present time. As business conditions changes so does the value of a company.

One way to use this idea is to track how business value changes over time. If you run a number of business valuations over a number of years, you can see both what factors affect business worth and by how much.

You can turn this subtle concept into a strategic business decision making tool. Say you decide to invest in business expansion and would like to see just how much the business value is affected. Using forward looking business valuation methods, such as the discounted cash flow technique, you can forecast business earnings to reflect a number of anticipated scenarios.

You can then select the business strategy that leads to the highest business value. As time passes, you can repeat business valuation to validate your assumptions. A number of business valuation results taken over time can help you see how your decisions translate into increased business value.

See Valuation Tour