When you are ready to sell my business Lake Morena, you need to know how much it is worth. Determining the worth of a business is often easier said than done. There is no one set formula for determining a business’s value. Regardless of the method you use, consider updating your calculations annually and speak to a professional business appraiser to get an accurate valuation. Here are a few key things you have to consider when determining the worth of your business.
Be able to defend your price
Determining your business’ value is essential, but can you defend the price you have put on it? Maintaining clean and accurate financial records improve the validity of a business valuation. When you are ready to sell my business Lake Morena, these records are the foundation of your defense to potential buyers. Some of the financial documents that you’ll want to use to support your valuations include the following:
- Income statement
How much does the business generate in annual sales? Your income statement portrays the gross revenue, operating expenses, cost of goods sold, and profits and losses of your business. With the help of a business broker in San Diego, you can calculate how much your business generates annually. This will help in determining how much your business is worth in a perfect market. In most cases, potential buyers use the income statement to determine how profitable your business is.
- Cash flow statement
Your cash flow statement provides insight into how efficiently your business is with its most valuable asset. A cash flow statement shows the inflows and outflows of cash for the business over a specific period. The current cash flow number is then discounted for its future value.
- Balance sheet
The balance sheet shows your potential buyers an overview of your business’s assets. Business assets include all the things your business owns that have value: equipment, inventory, land, and accounts receivable. Intangible assets like intellectual property also have value. The balance sheet also includes the company’s liabilities such as debts, loans, and other payables.
- Tax returns from the previous three years
Most potential buyers will want to see three years of your tax returns. This enables them to validate the numbers in your other financial documents. Multiples of gross sales are the crudest approximation of business valuation. There is no guarantee that this level of sales can be supported.
All the above documents will help you know how much your business is worth and help you defend the value you place on your business. All the same, as you sell my business Lake Morena, you will still need to work with a dependable business broker in San Diego. The role of the broker is to guide you through the sale process.
Sell My Business Lake Morena