Knowing the value of your business is the key to securing your financial future. Far too often business owners have relied on inaccurate information, friends and other uniformed sources who will tell them what they want to hear about the value of their business – only to find that reality is far different.
Professionally valuing your business, not guessing at its value, is critical if you do not want to risk leaving money on the table or scaring away buyers. Valuations provide a defensible position for the business owner and points out those areas which could be improved upon to increase the business’s value.
The business valuation process can take numerous alternatives and methods to arrive at a value. In general, valuations fall into three categories: 1. Asset Valuation 2. Market Valuation and 3. Seller Discretionary Earnings (SDE). Each of these approaches will generate a different value for the business. Providing these three valuations allows you to select the one which is the most suitable for your situation.
Sellers must remember that a professional valuation is an opinion of a price at which a typical buyer should pay for your business. It does not take into account the negotiating skills of the seller or buyer and/or their individual objectives.
With a many years of business transactions we know where to look and get the have the background to answer the question:
What’s your business is really worth?
“If you don’t know where you are going, you’ll end up someplace else.”
– Yogi Berra
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