5 METHODS OF CALCULATING HOW MUCH YOUR BUSINESS IS WORTH

Below are five Ways you can calculate how much your business is worth:

1. Take an Inventory of All Your Equipments, and Everything Your company Owns

First things first; you cannot truly know what your business is worth without an inventory of all your equipment, furniture and all your property.

Proper inventory will help you place value on all your office equipment, furniture, and everything your enterprise owns.

Although the equipment, furniture, amongst other things may likely depreciate in value, but the idea is to know what they are currently worth

2. Advertise Your Business for Sale in Order to Get an Idea of What Buyers Are Willing To Pay to Acquire the Business

As simple as it sounds, one of the easiest ways of knowing what your enterprise is worth is to list the business for sale in the market and see what buyers are willing to pay to acquire it.

For example; if you place a price tag of $10 Million on your company and most of the people who show interest in buying the it are willing to pay about $8 Million, then the worth of your business is $8 Million.

3. In Order to Know the Worth of Your Business, Value the Company Based on Its Assets

Another process that you should follow if you want to know the worth of your company is to value it’s assets. There are professionals you can hire to help you with the calculation of the value of all the assets and liability of your enterprise.

These folks know how to do the necessary additions and subtractions in order to arrive at an estimated figure.

4. Project and Calculate the Company’s Ability to Generate Sales (Revenue), Its Cash Flow and Profits

In addition to the value of your company’s assets, you will need to project and calculate your company’s ability to generate sales (revenue). The cash flow and profits your company can make within a given period is part of what it is worth.

5. Hire the Services of Professionals to Help You Get a Figure of How Much Your Business is Worth

In case you didn’t have the skills to do all the necessary calculations that should help you know the true worth of your company; you don’t need to break your head over it or enroll in a college to acquire the skills.

You can conveniently hire the services of professionals to help you value your enterprise.

Although, you will be charged a professional fees for their services, but you can rest assured that they will give you the current worth of your enterprise.

They can even go ahead to give you a projection of what your company will be worth in 5 year, 10 years or even 20 years if you are consistent with what you are doing.

There you have it. One of the things that you must consistently do to make your buiness to be worth it is to keep working at building a world class business so that it will be well priced.

Hard work, constant research, amongst so many others are some of the activities that you and your team must be willing to embrace of indeed you want to well worth.

-(Source: My Top Business Ideas)