It is a tempting proposition. After six years of successfully running a gift boutique, your friend has offered to sell you her business. You have been working part time at the store with her for most of the time the business has been open. You have helped with everything from ordering new merchandise, to checking in inventory, to determining prices, to helping customers select and make their purchases. More than anyone, you should know how well the business has been doing. It is not a big enough location that the owner needs to hire an entire staff of full time employees, but it is profitable enough for the owner to pay you and three other part timers to help out.
As you sit and consider the options with your husband, you understand that you could easily staff the store with your two daughters and your two daughter-in-laws. You all work well together and “the girls,” as you like to call them, have filled in at the store during busy holiday sale days.
While you are considering all of the wonderful opportunities owning your own business would include, your husband is taking the time to help you consider the practical and financial implications. Rightly so, he has found a company that will use the valuation market approach to determine the current worth of the business so that you can know if the asking price they are giving you is fair. Even though this is a good friend of yours, you certainly want to make sure that you are not paying too much for this new opportunity.
Business Valuation Analysis Reports Can Help you Determine the Correct Price for a Company
Although business valuation software is available, it is often best to rely on the services of a professional staff to determine the value of a business that you are either buying or selling. Using the valuation market approach, these experts will find comparable businesses to determine the value of a company. Although small business valuations are not an exact science, the most experienced appraisers can use information from similar companies and determine the value of almost all businesses.
Approximately 543,000 new businesses get started every month. Unfortunately, more than this number of employer businesses shut down each month. In some cases, businesses fail because the investors spend too much money on purchasing or starting the business. In today’s competitive market it is important that you get off t the right start in your initial financial investment if you want to succeed as a business owner. The key is to establish your business worth by determining why you need business valuation and assembling the required information so that the valuation is as accurate as possible.
Purchasing an existing business can be an exciting time. It is important, however, that you work with knowledgable professionals when it comes to determining the value of your new company. Likewise, it is important to understand the value of your business when it comes time to sell. The valuation market approach is a handy tool in determining the buying or selling price for any business.
