It is true that a business is only ever worth what a prospective buyer is prepared to pay for it.
But according to research, nearly half of business owners who are planning to sell their business are unaware of how much it is potentially worth. The problem is particularly marked for the smallest businesses, with only 37% having a clear idea of the potential value of their business.
The trouble is there is no precise valuation formula that can be applied to all businesses. And ask a number of accountants for a valuation on your business and they will all probably come up with different figures. Consequently it is often said that valuing a business is as much an art as a science.
However, there are steps you can take to increase the value of your business. whether you want to sell it soon or sometime in the future, or even to pass it on to the next generation of your family. As a starting point you might want to find out how attractive your business would be to a potential buyer and even the range of values it might be worth.
As a Certified Value Builder of the Value Builder System, our research of over 60,000 businesses shows that companies achieving a score of 80+ out of a possible 100, in their Value Builder Score get offers that are 71% higher than the average company. Whether you want to sell soon or run your business for decades, getting and growing your score makes economic sense.
To find out more about where your business is now, listen to this video on the Value Builder Score and then complete your details below to find your Value Builder Score.
having a realistic value of what your business is worth now and the possibilities for increasing its value
if the realisable value of your business forms a major component of your retirement planning, having an idea of what the business is worth now enables you to plan how to improve the value of it for when you retire
awareness of the threats and opportunities faced by your business enable you to mitigate the risks and take advantage of the opportunities to increase the business value.
establishing a realistic timeline to maximise the value of the sale of the business