What is your Business Worth? By Michael Cameron

Valuing your business may not come immediately to mind as you struggle through the daily grind.  However, your business value can be a significant asset worth reviewing.

Valuation Methodology

There are a number of ways in which a business can be valued –

-       Net Asset Method (used where there are significant tangible assets);
-       Capitalisation Rate Method (where value is determined based on a multiple of profitability);
-       Discounted Cash Flow Method (used for business with little history but great potential).

The method of valuing your business will be based on the characteristics of the business.  However, most businesses in the small to medium enterprise sector are valued using the capitalisation method, net asset method or a hybrid of these.

When are business valuations used?

Situations where a business valuation is required or may be useful include:-

-       Annual review for management purposes;
-       Obtaining/increasing finance facilities;
-       Family succession planning;
-       Sale of the business as a trade sale or management buyout;
-       External capital raising.

How do you increase your business’ value?

There are many ways to improve the value of your business.  However, minimising the risk for a potential purchaser through consistency of earnings/profit, or increasing profit and illustrating growth, are the most effective means.  At WHC we can show you how to achieve this with minimal disruption to your affairs.

If you would like further information or to discuss this in more detail please contact us.

OFFER

Incorporate a Valuation Appraisal into your annual review for a fixed fee of $750.

For existing clients of Williams Hall Chadwick, we are making a special offer to incorporate a valuation appraisal of your business based on the methods previously stated for a minimal fixed fee.  This process will help determine where you are adding value, or losing value within your business. 

(Note, the valuation appraisal is not a full valuation report for external purposes, it is a calculation to be used internally for management purposes.)

To join the Williams Hall Chadwick eNews simply fill in your details below: