Ready to Sell?
When you are ready to sell your business, the first step is to value it. This can be a difficult task, as there are many different ways to calculate a business's value. In this blog post, we will discuss the different methods of valuation and how to get the right price for your business. We will also talk about the process of selling a business using a business broker like us here at Turner Butler. Let's get started!
Valuing Your Business - Free Market Approach
The most common method of valuation is the free market approach. This approach looks at what similar businesses have sold for in the past and uses that information to value your business. This method is most often used when businesses are being sold through a business broker. The free market approach is a good starting point, but it is not always accurate because every business is unique and what works for one business may not reflect as well on another, especially if they offer different things within the same industry. Simply looking at what other businesses have sold for in the past can give you a ballpark idea of what your business might be worth, but it's important to remember that each business is different. If you want to get a more accurate valuation, you'll need to look at other methods as well.
Asset-Based Approach
Another method of valuation is the asset-based approach. This approach values your business based on the fair market value of its assets. Accountants and financial advisers often use this method. The asset-based approach can be a good way to value a business, but it does not always give an accurate picture of the business's true value. Some businesses have a great deal of physical assets whilst others do not have as much but will be performing extremely well.
Earnings Approach
The third method of valuation is the earnings approach. This approach looks at your business's past and future earnings. This method is most often used for businesses that are being sold through a broker. The past and future earnings can be used to value your business because they are a good indication of the business's potential. This method is often used for businesses that have been in operation for a long time and have a track record of earnings.
What is Your Business Worth?
Valuing Your Business
Now that you know the different methods of valuation, you can start to look at your business and determine what it is worth. It is important to remember that there is no one right way to value and it can be beneficial to use a range of different measures to come to an estimated value of your business. Here at Turner Butler, we use a whole array of different metrics to estimate the value of a business. If you wish to take the next step, why not get in touch and begin with a free business valuation of your company? Our team here at Turner Butler have over thirty years’ experience in business sales and can help you to get your business listed for sale in front of interested buyers..