How To Value Your Business

Whether you are ready to sell your business or you are considering buying one, the first step to making a successful decision is accurately valuing the business at the outset.

In this WOWBIZ Inside Scoop video, Frank Havercamp of Sunbelt Business Advisors explains the nuts and bolts of accurately placing a value on a company that is on the market.

Valuing components

Havercamp explains that the most important component to valuing a business is “net cash-flow” (otherwise known as EBITDA or earnings before the deduction of interest, tax and amortization). This includes a combination of salary, interest, one-time expenses, and sometimes personal expenses. Multiples are factored into the equation by looking at the industry’s maturity and market demand as well as the lifestyle and changing needs of the business’s end user. All these components play a role in deepening the accuracy of a business valuation.

Lenders drive valuation

Sunbelt follows the same valuing process as lenders. They know the rules of the bank and use matching formulas for valuation to maximize lending potential for clients. Watch this video to see how the highly experienced Sunbelt professionals place an accurate value on businesses.

 

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