How to Calculate Your Business Value the Easy Way

When it’s time to call it quits with your business, you need to have the right information in front of you. It’s easier to know how much your business worth when you take a scientific approach to appraise and assessing it.

So you might be wondering, how do I calculate the value of my business? We’d be happy to help you out.

Read below to learn the most straightforward ways to determine business value.

Hire a Professional Appraiser

The most straightforward way to get a valuation for your business is by hiring an appraiser.

When you hire a professional for this service you’re guaranteeing up to date numbers and formulas. Make sure that they are licensed and certified with the American Society of Appraisers (ASA) and other reputable organizations.

This means that they have received more than 100 hours of classroom time, in addition to taking a number of exams and adhering to a code of ethics. All of these steps matter when you’re getting ready to sell your company.

It’s important that you also evaluate why you want to sell your business and figure out which factors are most important. Some business owners might want to cut their losses and liquidate, while others are interested in merging to protect the longevity of the company.

Understanding what you hope to get from it will inform the way that you research your business’ value.

Make Use of a Small Business Value Calculator

There are also several readily-made tools you can put to use. Look for a professional small business value calculator.

This way, you can use some trusted formulas to ascertain how much your company is worth. Using these calculators gives you an excellent starting point when you’re trying to get a handle on the sales process.

Consult a Broker and Send Feelers Out

Professional business brokers can also be helpful when you’d like to know the true value of your company. These brokers understand the market and have several relationships that will give you a more accurate picture.

They also understand the different methods for breaking down a company’s value, including asset value, revenue, and cash-flow analysis.

Hiring a broker is important because they will also help you to advertise your company for sale and send out feelers. This takes things out of the speculative arena and lets you know how much legitimate buyers are willing to pay for your company.

From there, you can use this information as leverage when you are looking to retain the greatest value during the sales process.

Learn the True Value of Your Business Before Making a Sale

If you are assessing business value, the tips above will help you out more than you know. The more straightforward you treat these issues, the easier it’ll be to find a buyer for your company.

These are the types of points you should use to build a strong foundation for your business and entrepreneurial life.

Comb through our volumes of articles when you want to learn more about business and finance.