Valuating your Business

[vc_row full_width=”stretch_row” css=”.vc_custom_1607019205253{padding-bottom: 65px !important;background-position: center !important;background-repeat: no-repeat !important;background-size: cover !important;}”][vc_column][induzy_vc_section_title title_head=”h2″ title=”Valuating your” title_suffix=”Business” sep_type=”border”][/induzy_vc_section_title][vc_column_text css=”.vc_custom_1608136864813{padding-top: 0px !important;padding-bottom: 0px !important;}”]It’s important to be honest here. For most business owners the value of their business is a complete unknown.

In calculating your business’ net worth you will need to consider:[/vc_column_text][induzy_vc_list_item list_items=”%5B%7B%22icon_type%22%3A%22simplelineicons%22%2C%22icon_fontawesome%22%3A%22fab%20fa-accessible-icon%22%2C%22icon_simplelineicons%22%3A%22icon-check%22%2C%22icon_variation%22%3A%22c%22%2C%22icon_color%22%3A%22%2301ab86%22%2C%22list_title%22%3A%22What%20do%20you%20have%20to%20sell%20(this%20could%20be%20customer%20contact%20lists%2C%20contracts%2C%20inventory%2C%20equipment%2C%20property%2C%20intellectual%20property%2C%20special%20licenses%2C%20etc.)%3F%22%7D%2C%7B%22icon_type%22%3A%22simplelineicons%22%2C%22icon_fontawesome%22%3A%22fab%20fa-accessible-icon%22%2C%22icon_simplelineicons%22%3A%22icon-check%22%2C%22icon_variation%22%3A%22c%22%2C%22icon_color%22%3A%22%2301ab86%22%2C%22list_title%22%3A%22Are%20any%20of%20your%20special%20licenses%20or%20patents%20transferrable%3F%22%7D%2C%7B%22icon_type%22%3A%22simplelineicons%22%2C%22icon_fontawesome%22%3A%22fab%20fa-accessible-icon%22%2C%22icon_simplelineicons%22%3A%22icon-check%22%2C%22icon_variation%22%3A%22c%22%2C%22icon_color%22%3A%22%2301ab86%22%2C%22list_title%22%3A%22Is%20your%20business%20more%20valuable%20in%20one%20or%20more%20pieces%3F%22%7D%2C%7B%22icon_type%22%3A%22simplelineicons%22%2C%22icon_fontawesome%22%3A%22fab%20fa-accessible-icon%22%2C%22icon_simplelineicons%22%3A%22icon-check%22%2C%22icon_variation%22%3A%22c%22%2C%22icon_color%22%3A%22%2301ab86%22%2C%22list_title%22%3A%22What%20method%20will%20you%20use%20to%20determine%20fair%20market%20value%3F%22%7D%2C%7B%22icon_type%22%3A%22simplelineicons%22%2C%22icon_fontawesome%22%3A%22fab%20fa-accessible-icon%22%2C%22icon_simplelineicons%22%3A%22icon-check%22%2C%22icon_variation%22%3A%22c%22%2C%22icon_color%22%3A%22%2301ab86%22%2C%22list_title%22%3A%22What%20can%20you%20do%20to%20improve%20the%20value%20of%20your%20business%20as%20you%20go%20forward%20in%20your%20retirement%20or%20succession%20plan%3F%22%7D%5D”][vc_column_text css=”.vc_custom_1608137005445{padding-top: 50px !important;padding-bottom: 0px !important;}”]The first step is to valuate your business, and there are three methods for determining fair market value:[/vc_column_text][induzy_vc_list_item list_items=”%5B%7B%22icon_type%22%3A%22simplelineicons%22%2C%22icon_fontawesome%22%3A%22fab%20fa-accessible-icon%22%2C%22icon_simplelineicons%22%3A%22icon-check%22%2C%22icon_variation%22%3A%22c%22%2C%22icon_color%22%3A%22%2301ab86%22%2C%22list_title%22%3A%22ASSET-BASED%20APPROACH%20%E2%80%94%20Total%20all%20asset%20and%20personal%20investments%20in%20the%20business%20to%20date.%20If%20possible%2C%20choose%20fair%20market%20values%20for%20assets.%22%7D%2C%7B%22icon_type%22%3A%22simplelineicons%22%2C%22icon_fontawesome%22%3A%22fab%20fa-accessible-icon%22%2C%22icon_simplelineicons%22%3A%22icon-check%22%2C%22icon_variation%22%3A%22c%22%2C%22icon_color%22%3A%22%2301ab86%22%2C%22list_title%22%3A%22MARKET%20VALUE%20APPROACH%20%E2%80%94%20Look%20at%20comparable%20businesses%20that%20have%20sold%20recently%20and%20estimate%20your%20business%E2%80%99%20value.%22%7D%2C%7B%22icon_type%22%3A%22simplelineicons%22%2C%22icon_fontawesome%22%3A%22fab%20fa-accessible-icon%22%2C%22icon_simplelineicons%22%3A%22icon-check%22%2C%22icon_variation%22%3A%22c%22%2C%22icon_color%22%3A%22%2301ab86%22%2C%22list_title%22%3A%22EARNINGS%20APPROACH%20%E2%80%94%20Use%20one%20or%20more%20years%20of%20historical%20or%20future%20earnings.%20If%20possible%2C%20use%20net%20present%20value%20calculations%20to%20discount%20the%20future%20cash%20flow%22%7D%5D”][vc_column_text css=”.vc_custom_1608137120764{padding-top: 50px !important;padding-bottom: 0px !important;}”]Next, look at ways to improve the value of the business with the following methods. Devise ways in each area that will make a difference to your business value:[/vc_column_text][induzy_vc_list_item list_items=”%5B%7B%22icon_type%22%3A%22simplelineicons%22%2C%22icon_fontawesome%22%3A%22fab%20fa-accessible-icon%22%2C%22icon_simplelineicons%22%3A%22icon-check%22%2C%22icon_variation%22%3A%22c%22%2C%22icon_color%22%3A%22%2301ab86%22%2C%22list_title%22%3A%22Increase%20income%3F%22%7D%2C%7B%22icon_type%22%3A%22simplelineicons%22%2C%22icon_fontawesome%22%3A%22fab%20fa-accessible-icon%22%2C%22icon_simplelineicons%22%3A%22icon-check%22%2C%22icon_variation%22%3A%22c%22%2C%22icon_color%22%3A%22%2301ab86%22%2C%22list_title%22%3A%22Improve%20assets%3F%22%7D%2C%7B%22icon_type%22%3A%22simplelineicons%22%2C%22icon_fontawesome%22%3A%22fab%20fa-accessible-icon%22%2C%22icon_simplelineicons%22%3A%22icon-check%22%2C%22icon_variation%22%3A%22c%22%2C%22icon_color%22%3A%22%2301ab86%22%2C%22list_title%22%3A%22Reduce%20liabilities%3F%22%7D%5D”][vc_column_text css=”.vc_custom_1608137242190{padding-top: 50px !important;padding-bottom: 0px !important;}”]Often in a small business much of the real value rests in the owner’s realm of expertise, knowledge and intellect. If you (the business owner/manager) are planning to retire you will want to develop a plan for transferring knowledge, know-how and leadership responsibility. If your business is merely surviving and creating a job for the owner or just getting by day-to-day, it may not be worth more than the salvage value.[/vc_column_text][/vc_column][/vc_row]