Thoughts On Business Valuation

Posted By : Aubrey Mead , on Dec, 2015

 

If you plan to sell your business, you need to have an evaluation performed. If you live in Seattle, chances are you have undergone this process prior to establishing your business. As either a seller or a buyer, a business valuation is a very important step. In fact, many professionals consider it the first step a seller needs to take before putting his or her business on the market.

What Is Business Valuation?

If you want to put a value on your business prior to sale, you need to undergo the process called “valuation.” This is a set of measures employed to determine exactly what your business is worth. It is not to be undertaken lightly. You must also ensure that the individual or company you hire to perform the business valuation is reputable and understands all aspects, including the different approaches.

Three Methods of Business Valuation

A number of different business valuation systems exist. Three, however are commonly used to measure exactly what your business may be worth. These are:

The Asset Approach: It regards a business in terms of its views the business as a set of assets and liabilities. These facets provide the basics for determining the value of the company or business.

The Market Approach: Under this approach, the company valuation is based on the current and/or future market place. .

Income Approach: Those who use this approach frequently rely on the economic principle of expectation to help them determine the value of your business. They look at how much income, profit, etc. the business will bring in.

Some business brokers in Seattle, who perform this task, rely on one method. They prefer to opt for one over the other. Other individuals and firms, however, consider all factors. This will provide you with a more rounded and even accurate picture of the worth of your business.

What to Expect

Expectations that arise prior to a business valuation can be quickly dashed by reality. The major reason lies in different expectations. This can cause conflict between you, the business owner, and the evaluator. If your plan is to sell it to a family member, problems may increase. He or she may think you are inflating the value of the business in Seattle to drive up the price. One way to avoid this is to hire a professional

Hire a Professional for Your Business Valuation

Getting your Seattle business evaluated is the first step towards making a successful sale. It requires someone who understands the complexity of the project. You also need an individual who will work with you to help you set a price based on accurate information. A professional valuator can help you set a business valuation that will help you attract the right buyer.

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