Business Valuations

There’s a common misconception that valuations are only done at a time of sale or purchase. This isn’t necessarily the case.

Business success is often defined on profit and that’s a reasonable starting point. But if you follow the principle that the ultimate purpose of a business is to sell it then a further consideration must be the total value of a business.

The value of a business is linked to its profitability, net tangible assets and “other factors”. It is these other factors that can be difficult to ascertain a market value. Also, these other factors can hold different values in the eyes of a potential purchaser. So great care needs to be taken to ensure the valuation is directly fit for purpose and not some mathematical calculation just rolled out in the course of doing a set on accounts.

There are set valuation methodologies that are generally accepted however it is only through expertise and industry knowledge that you can get a proper true value of a business.

Shi Martz has a speciality in valuing businesses and this is appropriate whether acquiring or divesting.