There is no single way to value a business. However, if you are considering the sale of your company, it is likely that you will want to know how much you can expect to achieve from the sale – both for planning and marketing purposes.
Thankfully, most sellers tend to use one of four main methods as the best way of valuing their company, through assessing: price-to-earnings ratio, asset valuations, entry cost, and discounted cash flow. Below, we’ve explored each of these methods, in turn, providing an insight into the businesses that may suit each option, as well as an example of calculations for each.
However, before you get started, it is important to consider the assets and other factors that could influence your calculations, some of which could heavily affect the value of your business.
Valuation FactorsNo matter what valuation method you choose, you will have to consider one or more of your business’ assets and factors.
Established 10 years ago, this business has built an enviable reputation for designing and installing innovative, bespoke garden structures, mainly in the south-east of England, which presents an excellent opportunity to build on the brand in other a...
Generates multiple revenue streams through memberships, day passes, sun beds, supplements and rent. Strong second-tier management team in place, able to manage the day-to-day operations of the business.
Works with a strong network of partners and clients to facilitate recycling and collect from over 1,500 sites, utilising a large fleet of trucks to transport recycles to local processing plants. Offered for sale to facilitate retirement plans. Offers...
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