Do you have a business in Sorrento Valley and are getting ready to sell it? If you are, the first thing you must do is get a business valuation done. But why would you need this service? The valuation is primarily done to determine the proper market value of your business. This is essential to a successful business sale. In most cases, an experienced business broker 92121 trusts can help with the valuation.
While it is okay to do your own business valuation, it is highly discouraged. There is no one formula that works for every business. Every business is unique. To get an accurate valuation, there are many factors that have to be considered. A business broker 92121 trusts will use a detailed business evaluation process to determine the fair value of your business. An experienced business broker understands the importance of looking at several factors when determining the value of a company. At the end of the evaluation, your business broker in San Diego will provide you with a detailed fair market value as well as an explanation of that value.
A business valuation is meant to determine the economic value of a company. It is also used to determine the fair market value of a business for a range of reasons including:
- Establishing partner ownership
- Divorce proceedings
- Sale value
Getting an accurate business valuation is crucial when assessing both the opportunities as well as the opportunity costs as they plan for future growth or an eventual transition. During a business valuation, there are two common approaches that are used:
- Asset-based approaches
With this approach, the total sum of your investments is used to assign a value for your business. Value is determined using either the liquidation asset-based approach or the growing concern asset-based approach.
- Market value approach
This approach estimates value by comparing your business to other similar companies that were sold recently.
As aforementioned, there is no-size-fits-all approach in business valuation. All businesses are different. At times, to get an accurate valuation, the best way forward is to combine several business valuation approaches.
Whenever you need a business valuation done, start by making sure you are working with someone with lots of experience in the field. Second, you need to take a look at the valuation formula or approach. Make sure you pay attention to all the factors they consider.
If you are looking for a business valuation expert in San Diego, California, So-Cal Business Brokers has the expertise and the experience to help you package and prepare your business for sale properly.