Valuation

Mike Jani, MBA

Principal Broker & Franchise Consultant

What is your business worth?

What is a Business Valuation?

A business valuation is a general process of determining the economic value of a whole business or company unit. Business valuation can be used to determine the fair value of a business for a variety of reasons, including sale value, establishing partner ownership, taxation, and even divorce proceedings. Owners will often turn to professional business evaluators for an objective estimate of the value of the business.

When is a Business Valuation required?

Business valuation is typically conducted when a business is looking to sell all or a portion of its operations or looking to merge with or acquire another company. The valuation of a business is the process of determining the current worth of a business, using objective measures, and evaluating all aspects of the business.

Common approaches to business valuation include a review of financial statements, discounting cash flow models and similar company comparisons.

Fortune Business Brokers can help to estimate the fair value of your business. There are several formal models that can be used but choosing the right one and then the appropriate inputs can be somewhat subjective. That is where the expertise and experience of our brokers count.

What are the challenges in Business Valuation?

According to Bizbuysell.com, less than 5% of businesses that put themselves on the market every year are able to find buyers. The others don’t sell. The most common reason is the gap between a seller’s expectations and what a buyer is willing to pay.

Sellers not understanding business valuation and having expectations of selling price that was too high was the number one reason for the failure to sell their business.

What’s the best way to know what your business is worth?

The best way to determine what your company is worth is a comparable business analysis that helps you determine what you business is worth compared to businesses similar to yours. This approach looks at businesses that are similar to yours and compares them to the sale of those businesses. What your business is worth, is what a buyer is willing to pay for it. So understanding what buyers are currently paying for businesses similar to your own will help you increase the probability of a sale by pricing your business at the current market rate.

Contact us for a Complimentary Valuation of your business

Fortune Business Brokers will provide you with a valuation of your business that will help you to attract multiple buyers and get the highest selling price.