Especially as they begin to consider their exit, business owners want to know what their business is worth. For many, the life they have planned for after their exit depends on the funds they can get from selling the business, so they really need to know. The short (but not very helpful) answer is that your business is worth whatever someone is willing to pay for it. The secret to getting a more useful answer to the question is to think like a buyer.
In the article linked below I explain the three broad approaches to valuing a business and how each is calculated:
– Asset Based Valuation
– Cash-flow Based Valuation
– Comparable Business Valuation
I also talk about the three areas business owners can focus to increase the value of their business:
– Business Performance
– Business Risks
– Potential Buyers
Read the full article here, or reach out if this is a topic you want to learn more about.