If you are currently in the process of selling your business, either to have money for a more comfortable life or to finance your next business venture, one of the most important steps is to assess how much your business is worth correctly. The task is very complex and causes difficulties to many business owners, so here are three methods that you should combine to ensure that your calculations are correct:
- Tally your assets – evaluating your business assets’ worth, such as the machines you use for production, your commercial vehicles, stocks, and real estate, is an essential phase of calculating how much your business is worth. If you have any debts or liabilities, you should subtract them to find the correct value;
- Include expected earnings into your calculations – a business values more than its tangible assets, so turn to your accountant or a financial consultant to find out how much revenue your business can be expected to generate;
- Calculate strategic potential based on geographical location – a specific type of business might be worth more in an area that lacks competition and less in a region where there are many competitors. Assess the position of your business from that angle, too.
- Contact the best M&A business advisors for additional advice and support to ensure you create the best opportunity for a lucrative business sale.