Even with the simplest of small businesses, business valuation can seem like a very complex topic. However, if the reason for the evaluation is because you sold your business, the evaluation process should be fairly straightforward.
Buyers are attracted to buying your business because of their profit. This is why we always recommend using a few proven wins as the best way to pick a value for your business and get your price. You can now get the best business valuation from AW Business Brokers.
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But even with this simple method, there are many ways to change the outcome: are you using past gains or projected future profits? Before or after taxes? Think about it, how do you define the word "profit" in general? Does that mean the same as cash flow?
Let's cover all of these topics:- But first I want to point out that the method described here is best for smaller businesses where the owner also runs the business. Most of this also doesn't apply to many new or unprofitable businesses. You should use "asset valuation" for this type of business.
What advantages are you using?
When it comes to convincing buyers to choose your business over other companies in the market they can buy from, look at their motives. It is most logical for the buyer to determine a price range based on your actual proven profits. This immediately became their main concern – how much money the company actually made!