Our Approach in Business Valuation
When it comes to commercial business sales Solana Beach, the first thing you have to do is know how much your business is really worth. It is only with this information in mind that you will be able to set the right asking price and focus on your business’ strengths during marketing. At So-Cal Business Brokers we have sold many businesses and our team is experienced and knowledgeable in matters business valuation. We will help you know how much your business is really worth and what you can do to improve that value.
There are four types of values that are used to determine the worth of a small business.
- Fair market value. This is the price that a willing buyer is able to pay a willing seller. Conditions are both parties have reasonable knowledge of the relevant facts.
- Intrinsic value. This is value based on the stock values that investors would consider.
- Fair value. This is value based on the legal valuation standards. It can be used in divorce proceeds or in similar division of mutual assets circumstances.
- Investment values. This is specific to certain buyers and the amount they are ready to pay. The value here exceeds the fair market value.
When you come to us, the first thing we will do is determine the right type of value to use in your business valuation. In most commercial business sales Solana Beach, however, fair market value is the most popular type of valuation used. We use three accepted approaches in this.
With this approach, we value the assets of your business minus the liabilities using such methods as book value. It is good to note that this approach doesn’t represent the value of ongoing business with positive earnings. As a result it is not conclusive.
To further define the results from asset approach, we use market approach. This uses comparable sales data to determine the value of a business. We look at businesses that were recently sold that are similar to your business. This method is reliable in most cases and is a great indicator of fair market value.
With this approach, we determine the present value of income stream your business will bring to buyers. This is done using a range of complex calculations. Income approach is a great indicator of fair market value. It uses future projections of your business’ growth to identify the possible worth. Historic earnings are great indicators of future earnings.
Do you want an accurate business valuation report? Schedule a free consultation with us today. We will help you know exactly how much your business is worth and also help set the best asking price.