How do I value my business?
The most important place to start if you are thinking of selling your business is to know its value.
Almost without exception, a business owner thinks their business is worth more than it is. Equally, almost without exception, a business buyer thinks the business is worth less than it is.
What a seller of a business may not realize, if the buyer needs third-party finance such as an SBA loan, the SBA lender has an underwriting process that will only allow the buyer to pay what the SBA lender considers Fair Market Value (FMV) for the business. For an SBA lender, FMV includes a downpayment the buyer has in cash, monthly loan payments the buyer or borrower can service according to the historical cash flow from the business they wish to buy, meet their day to day living expenses and have a little in reserve in case the economy or industry goes soft.
What is the value of my business?
Because valuing a business is such an important part of having any hope of selling a business, with the help of some experts I’ve put together a program called “Value your business in 7 steps.”
This program was put together because many business owners were wanting to understand how to value their business.
Valuing a business has many moving parts. It’s not just a matter of taking one or two data points. To explain the nuances, this program has a series of 7 steps with the goal of explaining each step one email at a time.
Here is a page on my website that explains a little more about Valuing your business.
Build your business valuation in 7 steps
The program covers 7 primary topics and includes an Excel file for you to use in order to determine a basic business value. The program also includes 7 PDFs of information so you can thoroughly understand each of the 7 steps and how each step builds on the next.
The steps are as follows:
- The 3 methods of valuing a business.
- The Asset approach which is the first valuation method.
- Reviewing the business financial statements.
- Second valuation method; the Market approach
- Third valuation method; one specific method of the Income approach.
- Buyer Test Method; another Income approach method.
- The final step brings it all together to arrive at the final value of your business.
If you would like to learn more, simply click this link and how to value your business.
To start right away, click this link and enter your details and you will be on your way to learn about the Steps to Value Your Business.
The best part? This program is FREE.
If you have feedback or suggestions please feel free to email me at firstname.lastname@example.org.