You have invested blood, sweat & tears into your business. You are no doubt curious as to what it could be worth.
Many business owners believe the value of their business is net profit, or gross sales, multiplied by an industry rule of thumb. Using this method will often give a different result than the value that can be achieved by a LINK Business Broker.
The true value of a business is based on the following elements:
- Intangible Assets: goodwill, customer lists, trademarks and copyrights, distribution rights, a superior management team, physical location, brand recognition, special processes.
- Tangible Assets: real estate, plant, equipment, furniture and fittings, debts, machinery.
Four Key Elements of a LINK Business Appraisal include:
1. Economic Situation
A look at national, regional and local economic conditions existing as of the valuation date, as well as the conditions of the industry in which the business operates. After all, no business operates in a silo, and therefore, any appraisal needs to consider the environment in which a business operates.
2. Financial Analysis
A look at the financial statements of the business, using ratio, trend and industry comparative analysis tools to deliver a more scientific report on the financial state of the business. As the largest business brokerage in the world, LINK looks at industry comparisons both nationally and internationally. With a wide spread of brokers and more business sales than any other brokerage, we’re able to provide a more experienced report based on analysis of a huge volume of sales.
3. Accounts Normalisation
Any prospective purchaser needs to know how much cashflow they can extract from the business without unduly affecting operations. Our appraisal takes several approaches to making adjustments to the accounts to deliver a fair reflection of the opportunity. We deal with buyers and sellers every day of the year and draw on these practical real-world examples across all business sectors to share our knowledge with you.
4. Business Market Value
There are three broad approaches to business appraisals and then a number of techniques that can be used within each approach. At LINK, we consider all three business appraisal approaches before providing a recommendation on which to apply to a particular business.
The bottom line is your business is worth what a buyer is prepared to pay. LINK’s award-winning VALU.LINK tool uses literally hundreds of local sales data as market evidence along with subjective weighting factors and our own proprietary algorithms.
VALU.LINK results, combined with the experience and strategy of the team, gives an accurate estimate of a business’s true value.
When it comes to selling your business, you want to ensure you get the best possible price. LINK offers complimentary business appraisals, and no-obligation confidential discussions, so you can understand what your business is worth.
