How are   businesses valued?

Several factors influence the evaluation of businesses. Sales and profit margins are significant to most buyers and investors, but there is a lot more to take into consideration.
In every industry, the valuation process differs from industry to industry. Many other factors should also be taken into consideration by a prudent buyer, such as:
  • Location of the business
  • The type of clientele and the hours of operation – my target market
  • What type of business is located nearby, and how many of them are there
  • Is this a new company or has it been in business for some time?
  • Over what period of time has the business operated successfully?
  • When it comes to their growth over time, what has been the pattern?
  • In what ways is the competitive landscape changing?
  • The business has a wide range of competitors or it is a niche one.
  • How much does the company currently own in terms of assets
  • Does the company keep a list of inventory, properties, personnel, and vehicles?
  • In what amount and to whom is the company indebted?
  • The terms and conditions of leasing, including renewals and exclusive rights
It is merely a general list of items to examine, but every business entity needs in-depth due diligence in order to determine its value.
Let our years of Real Estate experience help you buy or sell a business entity. A Quick Zoom Meeting can be the starting point.