Selling a business- what is my business worth?
There is a lot of mixed opinion on this. Sellers are often intrigued to know what the value of their business is and their first port of call will be the accountant appointed by the business. There are of course other specialist agents that profess that they have the skill set to value a business. We would always advise that you obtain a professional valuation as it will be worth its weight and can be used as a negotiating tool with a prospective purchaser.
Amongst the popular methods used to value a business are as follows: working out the net asset value, price earnings/ ratio, discounted cashflow, entry cost, industry rules of thumb, what the strengths, weaknesses, opportunities and threats are, what similar sized businesses have been sold for etc. Whilst no one method can be used in isolation, whatever methods you use, when the dust settles, it boils down to what a buyer is willing to pay.
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