What is Valuation

What is my Business Worth?

Simply how much someone will pay for it

Given its profits, prospects, and circumstances

Valuing your Business is both an Art and a Science

An Art

Each buyer is different, so each can assess the same company and still offer vastly different amounts to buy the business.

A Science

Science aspect of Business worth illustrated by picture of microscope

The science is the theory, practice and benchmarks around the valuation of a private business. It's what one learns from an MBA, accreditation, and experience.

The Art of the Buyer: Financial vs Strategic Buyers

Financial buyers want to have access to your cash flows as a return on investment. Their motivation is to buy low and sell high later, so they are less willing to pay a premium for your business.

Strategic buyers want your business because they believe they can both sell more of your products and services and theirs. Strategic buyers tend to pay a premium over financial investors.

An excellent broker or M&A advisor will find both types of buyers for a potential deal. In this way, the seller can get a higher price and achieve all his exit goals.

and Timing

Furthermore, the circumstances of the business owner can have a huge impact. An unexpected crisis or an unprepared owner can make a profitable business worthless or limited to the value of its hard assets.

Your business is probably your largest and most illiquid asset. Knowing what it is worth is crucial. The problem is that most business owners have little or no idea what their company is realistically worth and what drives it.

Measure the Value and Independence of your Business
Compare you business with how over 60,000 other companies have scored on 8 key drivers of Business Value

True Freedom comes from Owning a Business that is Valuable, Scalable, and "Sellable".

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