How much is my business worth?
Suppose two companies have identical financial statement. Their earnings are the same, and their balance sheet also show identical numbers. Therefore they both have the same valuation, right? Well no, not right. There is a lot more than just the numbers that go into business valuation. We should know. We've been buying, selling and valuing smaller businesses for over 28 years.
There is no shortage of well meaning advice out there when it comes to business valuation. Business associates, friends, relatives and even CPAs and financial advisors offer simple formulas like:
- A company's value is .75 times (or some other multiple like 1 time or 1.25 times) its sales in a year
- A company is worth between 2.8 to 4 times its earnings before taxes
- A company is worth 3 times its projected earnings for next year etc.
While many people over simplify business valuations, others make it far more complex than it needs to be:
- You can buy business valuation software applications for anywhere from $150 to $500. These packages require installation on your computer and require hours of work to get to the answer you are looking for: How much is my business worth?
- Business valuation pros do a good job but charge upwards of $8,000 to $10,000 or more for a valuation of a company; even a smaller company.
- There are even fancy seminars put on by less than scrupulous companies that claim that they can get you much more for your company than a conventional broker or intermediary can get. The buyers are usually "outside the United States" and for some dubious reason will pay more than a US buyer will. However there is a catch; you have to pay them $25, 000 to as much as $50,000 upfront, with no promise of success before they will talk to these overly generous foreign buyers.
Based on our years of experience valuating and buying companies, we have developed a powerful and easy to use web based valuation too. It is neither too simple nor too complex.
This web based valuation program, actually interviews' you asking for financial and non financial information. The financial information is readily available from your company's most recent tax return or balance sheet and income statement (P&L). In about 20 minutes, you will have a complete professional valuation report on your business or the business that you are considering for acquisition. The rationale for the valuations is explained in detail. In a report that can be easily printed out and used for:
- Getting financing at the best possible rates and terms
- Negotiation a favorable buy-sell deal
- Financial planning for retirement and other purposes
- Many other uses
So, if you want to know the real world value of a company you want to buy or sell, or if you want to learn more about out program, try the software now.
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