Question on business worth, help needed!

Discussion in 'Growing and Managing a Business' started by mlwhite79, Dec 6, 2013.

  1. mlwhite79

    mlwhite79
    uix_expand uix_collapse
    New Member

    Joined:
    Nov 7, 2013
    Messages:
    5
    Likes Received:
    0
    Hey guys, does anyone on here have experience or a preference with a valuation tool that can help me understand what a business is worth? Thanks in advance. :)
     
  2. ziggzagg

    ziggzagg
    uix_expand uix_collapse
    New Member

    Joined:
    Dec 10, 2013
    Messages:
    1
    Likes Received:
    1
    Hi there! In general, there is no one single tool or method that will tell you what a business is worth. There are several factors that come into play, e.g. hard facts like the businesses revenue, profitability, but also other factors like the market the business operates etc.

    In most cases a valuation is based on an EBITDA multiple, i.e. the EBITDA of a company is calculated and a multiple, which depends on the specific industry is applied. If you search for the term EBITDA multiple you're going to find lots of helpful stuff.

    Cheers
     
  3. mlwhite79

    mlwhite79
    uix_expand uix_collapse
    New Member

    Joined:
    Nov 7, 2013
    Messages:
    5
    Likes Received:
    0
    Is there a service or online tool that considers those factors and comes up with a ballpark estimate for me?
     
  4. George loumako

    George loumako
    uix_expand uix_collapse
    New Member

    Joined:
    Dec 9, 2013
    Messages:
    2
    Likes Received:
    0
    sorry,i am not familier with this also
     
  5. mlwhite79

    mlwhite79
    uix_expand uix_collapse
    New Member

    Joined:
    Nov 7, 2013
    Messages:
    5
    Likes Received:
    0
    Still looking for a recommendation for an online valuation tool that could give me a ballpark estimate of business value... Any good experiences?
     
  6. ValuePro

    ValuePro
    uix_expand uix_collapse
    New Member

    Joined:
    Jan 15, 2014
    Messages:
    3
    Likes Received:
    0
    It seems like you need a valuation but don’t want work with a professional (at least not yet)? For a ballpark valuation, there are a few sites to consider, like Valusource for small business at http://valusource.com/Products/BusinessStakeholders.aspx

    If you need something legal, you may end up needing to use a professional, but this could be what you are after. A lot of the pros use their higher end stuff, but this is affordable and should work.
     
  7. EUWindowsHost

    EUWindowsHost
    uix_expand uix_collapse
    Member

    Joined:
    Nov 19, 2013
    Messages:
    41
    Likes Received:
    0
    Online valuation tool? Do you mean the how the website worth? Is it correct?
     
  8. bizwizgenie12

    bizwizgenie12
    uix_expand uix_collapse
    Member

    Joined:
    Feb 26, 2012
    Messages:
    54
    Likes Received:
    3
    Valuation of any business

    Hi,

    By "Business Valuation", we mean the value that a running business is perceived to have in its industry or domain. This usually comes into the picture when you are talking about selling or acquiring a business.

    For instance, when Chrysler was acquired by Fiat recently, analysts immediately worked out its business value post the acquisition.

    Hope this brief explanation helps.
     
  9. bryanblake

    bryanblake
    uix_expand uix_collapse
    New Member

    Joined:
    Jan 10, 2014
    Messages:
    5
    Likes Received:
    0
    Evaluating the value of a business includes taking a large number of factors into consideration. There are the equitable value of the business and its possessions. These are fairly easy to calculate. If you were to sell every physical item the business owned how much would that be worth? This would include real estate, computers, fax machines, phones, and everything else. The next aspect is to evaluate the value of current and future sales and potential customers. This will vary depending on the business you own. A business that charges a monthly fee with contracts will have a completely different number for this than a mom and pop restaurant on the corner. The final aspect of the value of a business is to evaluate the intellectual property of the company. What is the value of the systems that have been developed and put in place? What is the value of the brand itself?
     
  10. Changed Creation

    Changed Creation
    uix_expand uix_collapse
    Premium Member
    Premium Member

    Joined:
    Sep 3, 2013
    Messages:
    153
    Likes Received:
    66
    There is a lot to be said about the tools that can be used for valuation. But this reminds me how important it is for a business owner to have it as a primary goal in mind to work yourself out of the business. If you were for instance thinking of buying a business, but the business connections and know-how is locked up in the current owner, no matter how successful the business currently is, or how much money it is currently making, you will have to employ him until all of that has been transferred to your mind, or the business will suffer extensively when you take charge even if you are very skilled! This is also an important factor to keep in mind as you grow your business. It will only build value as it becomes sell-able as you replace yourself.
     
    • Like Like x 1
  11. Krisz Rokk

    Krisz Rokk
    uix_expand uix_collapse
    Member

    Joined:
    Jan 9, 2012
    Messages:
    87
    Likes Received:
    15
    What happens to the business if you take yourself (the owner) out of the equation? You need to have proven systems in place, operation manuals etc.
    Create an Information Memorandum and include: sales documents, investor opportunity documents and the business plan.

    Investors are looking for the following 4 things:
    1. People
    2. Likelihood to get money back
    3. The actual business opportunity itself
    4. Actual return

    Get your legals in order and de-risk your business. Talk to professionals - preferably Angel Investors; if the company is big get in touch with Venture Capitalists. You can also approach corporate advisers (they will pitch for you). It will save you loads of time, money & energy simply by getting the right information upfront.
     
  12. mlwhite79

    mlwhite79
    uix_expand uix_collapse
    New Member

    Joined:
    Nov 7, 2013
    Messages:
    5
    Likes Received:
    0
    Thank for the insightful responses, everybody.

    does anybody have experience with this kind of service?
     

Share This Page