If you are curious about the value of your business there are a couple of good ways to determine the value.
The
first is an independent third party evaluation. The advantages of this
solution is that it is a solid number. There are, however, a number of
disadvantages. 1. There is a cost. 2. It has a very limited lifespan. As
your revenues and expenses vary so may the value of your business. 3.
It will take a little time in accumulating all the data necessary for
the computer to crunch the numbers.
The second way is
for a business broker to provide an opinion of value. This doesn't mean
he or she will simply take a look at your P&L or tax return and say,
"Um...looks like $125,000 to me." In Florida members of the Business
Brokers of Florida have the benefit of having data on thousands of
business sales. So we can work with you to determine the true benefits
of owning your business. We can then compare your results to those of
similar businesses that have sold. In the end I can tell you that no
business similar to yours has ever sold for less than X dollars or more
than Y dollars.
If the value range isn't where you want it
to be I may also be able to pinpoint areas in which your expenses are
out of the norm. Is your Cost of Goods sold too high? Perhaps it's the
rent as a percentage of revenue?
There is one big
advantage to this system. There is no cost or obligation. I provide this
as a service to clients and potential clients. All it takes is a phone
call or email to get the process started.
The disadvantage
of this process it is that is only an opinion of value, but it is based
on facts. The more accurate your numbers and the larger the sample of
similar businesses the higher the likelihood that the opinion is on
target.
Give me a call and let's talk about your business.
Jon Hunt
Senior Associate
Florida Business Exchange
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