After years of working and grinding, your business has become successful and profitable. It’s a big part of your life, and maybe you’re thinking of selling it – or you’re looking for a new investment.
But how much is your business worth? Trying to come up with a figure on your own can be difficult, and if you’re trying to sell it or are looking to leverage its worth for other projects, a business valuation has to be performed by a qualified service provider.
A business valuation determines the economic value of a whole business or operation. Once it’s complete it can help establish the sale value, establish partner ownership, and taxation. With this information you can figure out if you want to sell now or wait until you can add more value.
With this evaluation complete, you can also work with a bank or other lending institutions if you’re looking to take out a new loan to improve your current business via improvements, purchasing new equipment, or expanding the physical size of your operation.
When you work with a company that provides this service, you need to make sure that the broker who completes the valuation knows that it must be in compliance with the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation and the Business Appraisal Standards of the Institute of Business Appraisers.
It’s crucial to the process that the appraisers follow the guidelines and rules of these two entities. These rules are in place so that all businesses and real estate properties are measured in a correct and consistent manner.
There are numerous parts of a business valuation, but there are basically three main areas of concentration that will yield an accurate and reliable figure.
The first is cash flow expected from the business. The second is how that influx of cash will enable growth. The last measure is the risk involved, which is defined as factors that can lower the profit of a business, and possibly cause it to fail.
Murphy Business provides business valuation services that are conducted by appraisers who follow the stated guidelines created by the federal and state governments. They will create a business valuation report that an owner can use to determine the selling price of a business.
We can also conduct a business appraisal report, which is different from a business valuation in that it can be used for litigation support and review by third parties, such as the Internal Revenue Service.
When you work with one of our experts, you will receive constant feedback and guidance throughout the process. Once your business valuation is complete, he will review it with you and answer any questions and provide additional information.
After the business valuation has been completed, Murphy Business can work with you to sell your business at the right time, for the best price. We can also help you purchase a new business if you’re looking for a challenge or investment opportunity.
Contact Murphy Business Sales today, we look forward to working with you.