{"id":83,"date":"2010-09-28T20:18:40","date_gmt":"2010-09-28T20:18:40","guid":{"rendered":"http:\/\/murphyword.com\/blog\/?p=83"},"modified":"2020-04-08T10:37:29","modified_gmt":"2020-04-08T14:37:29","slug":"business-valuation-what-is-a-business-worth","status":"publish","type":"post","link":"https:\/\/murphybusiness.com\/blog\/business-valuation-what-is-a-business-worth\/","title":{"rendered":"Business Valuation &#8211; What Is a Business Worth?"},"content":{"rendered":"<p>\n\tDetermining the value of a business is the first step in the process of buying or selling a business. The value of a business is related to the risk involved, the ability to generate an income stream, and the value of the tangible assets.\n<\/p>\n<p>\n\tAn expert business valuation report will be based on standard valuation methodology combined with the experience and knowledge of the valuation expert. The specific purpose of the business valuation and the size of the company will determine the depth of analysis and research required.\n<\/p>\n<p>\n\tBasic factors that influence value are:\n<\/p>\n<ul>\n<li>\n\t\tValue of hard assets\n\t<\/li>\n<li>\n\t\tRecast cash flow analysis: normalize earnings\n\t<\/li>\n<li>\n\t\tReview factors that can impact future earnings\n\t<\/li>\n<li>\n\t\tCalculate and apply external factor discounts\n\t<\/li>\n<li>\n\t\tAnalyze intangible values\n\t<\/li>\n<\/ul>\n<p>\n\t&nbsp;\n<\/p>\n<p>\n\tThe final step of a business valuation report is to make sure that the suggested price for the business passes the sanity test:\n<\/p>\n<ul>\n<li>\n\t\tWill the income cover the debt service?\n\t<\/li>\n<li>\n\t\tWill the cash flow provide the owner or manager with a reasonable salary?\n\t<\/li>\n<li>\n\t\tCan the cash flow provide for future capital equipment requirements?\n\t<\/li>\n<li>\n\t\tWill the cash flow provide a cushion to allow for fluctuations in the business cycle?\n\t<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Determining the value of a business is the first step in the process of buying or selling a business. The value of a business is related to the risk involved, the ability to generate an income stream, and the value of the tangible assets. An expert business valuation report will be based on standard valuation &hellip; <a href=\"https:\/\/murphybusiness.com\/blog\/business-valuation-what-is-a-business-worth\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Business Valuation &#8211; What Is a Business Worth?&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[23],"class_list":["post-83","post","type-post","status-publish","format-standard","hentry","category-business-consulting","tag-business-valuation"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Business Valuation | What is a Business Worth | Murphy Business<\/title>\n<meta name=\"description\" content=\"Business Valuation - What Is a Business Worth?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/murphybusiness.com\/blog\/business-valuation-what-is-a-business-worth\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Business Valuation | What is a Business Worth | Murphy Business\" \/>\n<meta property=\"og:description\" content=\"Business Valuation - What Is a Business Worth?\" \/>\n<meta property=\"og:url\" content=\"https:\/\/murphybusiness.com\/blog\/business-valuation-what-is-a-business-worth\/\" \/>\n<meta property=\"og:site_name\" content=\"Blog - Murphy Business\" \/>\n<meta property=\"article:published_time\" content=\"2010-09-28T20:18:40+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-04-08T14:37:29+00:00\" \/>\n<meta name=\"author\" content=\"Murphy Blog\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Murphy Blog\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/murphybusiness.com\/blog\/business-valuation-what-is-a-business-worth\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/murphybusiness.com\/blog\/business-valuation-what-is-a-business-worth\/\"},\"author\":{\"name\":\"Murphy Blog\",\"@id\":\"https:\/\/murphybusiness.com\/blog\/#\/schema\/person\/e0ea55754e128a28657f5362fccca4d7\"},\"headline\":\"Business Valuation &#8211; 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