Valuing a Business

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 and/ or business valuation specialist. Both of whom can use industry standard techniques to provide guidance and ball park figures to work from.

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.