How do you value a business?
The proprietary algorithm balances that is used in our valuation calculator balances the desire to give a reasonable approximation of the value of a company against the need to keep the process simple and accessible for entrepreneurs who don’t have a formal financial background. We work with a model that uses three valuation techniques (discounted cash flow, earnings multiple and net asset value) to arrive at a blended answer.
We suggest a tight range based on this blend. The final result explains the best use-case for each methodology and ways to increase your valuation.
How does this valuation tool work?
We will need to know the basics about which country and sector you primarily operate in, along with how many employees you have and the age of your business. You will need your recent financial statements or your accounting system so that you can accurately provide information about annual turnover and expenses.
We will need to know whether you own or lease your physical property and what the approximate market value of it would be. We also need to understand how long it takes your customers to pay you and how long you can take to pay suppliers. You do not need to be an accountant to answer the questions, but if you get stuck then you can save your progress and consult your accountant or a friend to help you finish the inputs accurately.This is the most important part of the process. The valuation algorithm we use is only as good as the inputs!
How should I price my business?
When you choose to partner with Exit Strategy in the preparation of your business for a sale, we aim to optimize for maximum value.A great starting point is our independent valuation calculator, which immediately gives you an indicative valuation range.
Is my business ready to sell?
Take our exit-readiness quiz to see how ready your business is to sell for max value. Learn how close you are to your big exit. Discover your Exit Strategy Score™ and receive 3 actionable tips to exit for maximum value.
Can I sell my business when it is not profitable?
Yes, you can sell your business even if it is not (yet) profitable. We support business owners with a wide range of businesses, regardless of their current profitability. There are plenty of buyers who are interested in potential rather than current earnings. They might be looking for businesses they can turn around, enter a new market, or integrate with their existing operations.It's important to be transparent about your business's financials and potential for future profitability to attract the right buyers.