Want to Learn the Value of Your Business? Here is a Quick How to Guide

Business valuation experts

If you are a small business owner, it is incredibly important to know your business valuation. A small business valuation appraisal is crucial if you are looking to sell your business or gain an investor– as no one will want to get involved with you unless the numbers are on the table! Have you ever wondered “what is my business worth?” Well look no further, as we have a quick and easy guide that will help you with company valuation.

Figure out your formula

Calculating business valuation does require some math. You will need to take your average annual sale profits, your annual growth percentage, and combine them with your future growth. This way you will be able to see exactly how much you can feasibly grow with your current revenue stream.

Crunch the numbers of how much it would cost to liquidate right now

This includes taking into account all your assets, accounts receivable, your payroll, equipment, inventory if you have any, and any credit lines you may have. Because these numbers do not measure your future value, this number will show exactly how much your business is rated right now, in case you need to sell fast.

Do you have any assets and liabilities?

This should be one of your first moves, because if you have any assets that cannot be liquidated you may run into problems. You need to differentiate between tangible assets that you possess and can possibly sell for some cash flow, and liabilities including patents, trademarks, the company’s name and logo, and even your mortgage. Simply put: you will want to figure out what exactly you have that is of value to someone else, not just yourself. Meaning your trademark may not be valuable to an investor, but the amount of employees you have and how many you plan to hire in the future will.

Go to a professional

You have more important things to do as a business owner than to sit around and try and answer the question of “what is my business worth?” A professional will be able to crunch all the numbers for you, and give you tips and tricks on how to get the most bang for your buck that you can.

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