When it comes to proving the value of your business, it is easy for business owners or passionate employees to get caught up in the excitement surrounding their venture, and expect others to blindly join or invest in the company with the same enthusiasm. But the truth is, without data and facts to support a company’s value, sharing your vision and creating interest in your company, especially in the financial world, will be very difficult.
This is where business valuation comes in.
What is Valuation?
Basically, valuation is what a company is worth.
While this sounds straight forward, it can be difficult to measure the worth of a company, especially when it is a brand new venture with no previous history to draw upon.
A few common methods for determining the value of a company, even those without a history, include:
- Liquidation Value – What a business would yield in actual cold hard cash were the business to be liquidated.
- Replacement Value – The cost of replacing the entire business from the ground up.
- Book Value – The balance sheet and the book value of a company’s assets minus any liabilities.
- Earnings Based Valuations – A value based on future earnings of the company.
Which method to use depends entirely on your goals, the type of company you are running, and who ultimately performs the valuation of your company. Whatever the method, getting that resulting valuation can assist you in several ways.
Why is Valuation Important?
Understanding the value of your business is necessary in several situations. Some of these situations include:
- Securing investments to start your business.
- Opportunities for selling or merging your company.
- Determining buy-in prices for a new partner or member.
- Securing loans for expansion.
- Determining tax implications.
- And more.
In any of these cases, knowing the value of your business is a tool that can help you secure the financial assistance you need, or grow your business through mergers or new partners. These are all valuable components of creating a successful business.
Our Business Valuation Services
Valuation can be difficult to determine, especially when it comes to a brand new business. Our team of experts have a strong background in the financial world, and can assist you in determining the value of your company in a way that gets potential investors, partners, and others to see the worth of your company.
Whether you need the team at PlanIt Business just for your business valuation, or would prefer to invest in an entire business plan in an effort to secure funding, we can help your company grow by assisting you in the positioning of your business as a valuable endeavor.
Ready to discover the true value of your business? Contact us today by calling 800-894-0828 or by filling out our online form.