There is no exact science to this and ultimately the value of a business is determined by what price a willing buyer will pay for it. Advice must be sought by an accountant
What matters are taken in to consideration when valuing a business (this list is by no means exhaustive)?
- Name, branding, trade names, trade marks, domain names, goodwill.
- Other intellectual property rights owned and enjoyed by the business.
- Business history, historic performance, present performance and future projections.
- Client base and value of contracts or orders.
- Location, premises/ property.
- Employees and skill sets.
- Financial aspects, gearing, loans, creditors, debtors, stock, raw material, bank account balance, cash flow, credit accounts, gross profit, net profit.
- Supplier and distributor chains and availability of resources.
- Strengths, weaknesses, opportunities and threats of the business.
- Regulatory control.
Some of the items mentioned will be difficult to quantify due to the fact that they are intangible. intellectual property rights, goodwill etc being key examples.