How to value a company

With such a buoyant global market the world of business can be notoriously risky nowadays and, although you may not be ready to actually sell, it is always a good thing to know the value of your company. There could be a number of reasons why you might be considering the value of your company at any particular time. You may actually be ready to exit for retirement; you may well be looking to the future with perhaps another business opportunity or you may want a valuation as a basis for management to actually improve the business. Whatever the reason any good business person will be keeping on top by ensuring they can choose the most appropriate and profitable time to sell their business and get the best deal possible. It is vitally important that your company is valued accurately, after all, you may have spent much time, energy and money building up a profitable business and you deserve the best return for that investment.


Factors to be considered when valuing a company


Just where do you start to put the right value a business? There is obviously a formula based on a multiple of net profit that any accountant who is familiar with your sector can give you information on, however, is this really enough to put a price on something that will have been such an important part of your life? There are experts in this field who can work out the real value of your company, who have proven experience and high levels of success in the area of valuing businesses and it makes sense to avail yourself of this experience in order to get expert guidance on the process of gaining the most accurate valuation. It will doubtless save you money, time and heartache. An experienced valuation company will build in all the key elements that have to be considered such as:


● Future financial performance – whether or not the business can demonstrate long term growth;

● Strength of brand – Customers perceptions of the brand and whether this could provide an opportunity to provide other strategic benefits;

● The current management – evidence of a strong management in place can be very attractive to potential buyers or investors as it leaves them free to focus on other things;

● The customer base – How strong is your customer base? If it is strong then it opens up opportunities to use this as a target for other goods and services.


A good example is the full break down that can be found on our site, or alternatively you can use our business value calculator to give you more of an accurate financial value guide within today’s market. When looking for the best guidance possible do choose a company that can demonstrate high levels of success and do not hesitate to ask for examples of recent and past deal history.  So when considering your exit strategy, make sure get it right. You may have too much to lose if you get don’t take the time to access the guidance you will invariably need.