How do you value a business?

How much is my business worth? A question that many business owners ask themselves when it’s time to move on to a new venture, or when it’s time to retire.

There are several different factors to consider which could positively affect your business value, which a number crunching calculator does not tell you.

Considering Selling?

A couple of pointers to give you guidance on your business worth.

• Can your business show a consistent level of performance for at least the last 3 years?
• Does your business have a good name in the marketplace?
• If a potential buyer had to do a little market research on your business, what would they find?

What is a buyer looking for?

What does a potential buyer look for when looking to invest into a business?

• Strong brand presence however, this can vary between industries.
• IPR (Intellectual Property Rights) patents, trademarks, copyrights, trade secrets, these are all valuable assets to the company
• Repeat business
• A top management team is the making of a strong a business. This will not go unnoticed to someone who is looking to get involved.

All of the above would be attractive to a potential buyer, it shows steadiness, growth, and a long-term benefit in acquiring this business.

Making an Offer

Several factors come into play when a buyer looks at making an offer such as:

• The points mentioned above
• A multiple of the EBITDA (this will vary from industry to industry)
• Assets value less the liabilities

Speak with the Experts

In conclusion when deciding to sell your business talk to the experts and get a professional guidance on value before rushing into a transaction.

For a comprehensive valuation for your company please call Commercial Road on 08081471091 or email us on enquiries@commercialroad.com