Magnitude is a Tucson brand marketing, public relations, and multi media agency. Besides media and marketing, we also offer professional business services. Our business development team can help improve your customer experience and provide top-notch business valuation.
What is Business Valuation?
Business valuation is a process in which you determine the economic value of your company or business. There are many reasons why you would want to know how much your company is worth. For example, if you are selling your company or joining a partnership, you’ll need to know this number. However, it’s difficult to do it on your own, so usually, company owners turn to business valuators.
Why do businesses do that? Because there is more than one way to define your company’s worth. While the owner might put first the benefit to the community, the investors might look at the income history instead.
All in all, business value is the price you’d expect to sell your business for. Depending on the people involved in the process, your expected value might differ from the actual cost of your company. If you are looking to sell your business, it would be best to do a valuation and start a marketing campaign, instead of going for a quick sale. This way, you’ll have better chances to sell for the expected amount.
Three ways to valuate your business
There are three ways to find out the value of your business: asset, income, and market. All of these have multiple methods you can use, but a right combination of those will give you the most accurate number.
First, when it comes to the asset approach, you will be looking at the value of your business assets. The goal of this method is to decide the worth of your business based on the fair market value. For example, you can subtract the liabilities from the current assets, and the result will be your business value.
Second, let’s look at the income approach. Here you will look at whether your business generates profit. As such, you look at your future cash flow and determine its worth on the present day market. This way, you also take into account the risks in small business.
Last but not least, a market approach is all about comparing your business to others. Basically, with this method, you compare the history of sales and earnings between your company and your competitors on the market.
Why should you choose our services for evaluating your business?
As we mentioned before, business valuation is difficult, and companies usually rely on professional evaluators to do it for them. That’s why we at Magnitude want to help your business grow with our services. We’re business professionals that own a portfolio of our own companies.
We look forward to discussing your next project with you. Contact us to schedule your free brand consultation.
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