Archive for March 7, 2016
If you own your own business, chances are good that you will someday need to know how valuable it is in the greater market, either to entice investors in order to grow your business or to put your company up for sale. When you’ve decided on one of those options, your first step should be to procure a report summarizing your company’s overall worth, otherwise known as a business valuation. Once you have developed a clear idea about why you need this report, it’s time to experiment with business valuation software or consult experts at a business valuation company. Either way, you’ll be provided with a breakdown of the materials you’ll need to provide for a successful valuation.
Since a business valuation is essentially an economic analysis exercise, your company’s financial information
Small business owners that need to ascertain the value of their business often find themselves sorting through a range of confusing concepts and methods. A confusing process becomes more frustrating without an understanding of the key terms, like business comps or capitalization rate, that are employed in the business valuation field. Here are six of those terms defined to help make the process somewhat smoother.
- Business Comps: Business comps refer to the product of comparison between revenue and expense in the current year to that of the previous year.
- Capitalization Rate: More often called the cap rate, this is the net operating income of a business or property divided by the property value. The property value is what a certified business