Several elements play a role in a company valuation, and the price a potential buyer may be willing to pay. The bottom line is a our business value calculator can give an indication of the price range, however to value a company an indepth business value appraisal involves not only weighting factor, but other key components including risk profile, location and buyer demand. The list goes on!
So, how do you value a business
It’s common for business owners to think that the value of their business is simply net profit or gross sales multiplied by an industry rule of thumb. But what they perhaps don’t realise is that the value of a company’s intangible assets is often far greater than the tangible assets. However, valuing intangibles can be complex and requires expert knowledge and attentive analysis of many business facets. LINK’s expert business brokers can provide comprehensive insight into the valuation process, as well as help you increase your business’s worth to get it ready for the perfect sale.
The 4 key elements of a LINK business value appraisal
It’s crucial to recognise that businesses do not exist in isolation; they are influenced by the environment in which they operate. Our approach considers not only the inherent factors but also the external elements that come into play when determining how to value a business. LINK’s appraisals take into account broader economic contexs at national, regional, and local levels on the valuation date, along with the specific industry conditions in which the business operates.
Prospective buyers must gauge how much cashflow they can extract from the business without disrupting operations. Our company valuation appraoch employs various methods to adjust financial accounts, ensuring an accurate representation of this opportunity.
A look at the financial statements of the business, using ratio, trend and industry comparative analysis tools to deliver a more scientific report on the financial state of the business. As the largest business brokerage in the world, LINK looks at industry comparisons both nationally and internationally.
Business valuation encompasses three broad approaches, each offering a range of techniques. At LINK, we carefully evaluate all three approaches before making a recommendation on which one to employ for a specific business.
Frequently asked questions
All sellers and buyers ask great questions about selling a business. Here are the answers to some we’ve heard before.
A business or company valuation is a process and a set of procedures used to estimate the economic value of an owner’s interest in a business. At LINK, we provide business valuations through an “appraisal methodology” to determine the price someone is willing to pay or establish the price to affect the sale of a business.
Contact us for a
Our LINK Business Brokers are able to provide advice and insights that will improve the value of your business. Simply fill out the form below or call 0800 546 528 for an obligation free, and 100% confidential chat.