Have you ever wanted to know how much your business is worth? Our new partner Ascenum offer tools that can help you better understand the true value of your company. They’ll give you insights into how much you could get from selling your company, and help you make decisions to make sure you benefit financially from all the hard work you put into it.
The basics of valuing your business
No matter how technically you approach your business evaluation, at the end of the day, it will come down to what the buyer is willing to pay and what the market says it’s worth. Think about it like buying a house. Sometimes prices skyrocket and it’s a seller’s market, other times prices drop it’s a buyer’s market. Ascenum’s business valuation tools will give you a basic idea of what your business is worth.
Business valuation is typically an earnings-based exercise. It will also take into account your assets like inventory, machinery, any real estate you own, and patents. Ascenum’s business tools also capture less tangible items that are harder to put a price tag on. For example, the power of your brand in the marketplace or a unique trade secret like coding in software technology.
When it comes to the valuation of a mid-sized business, the discounted cash flow (DCF) approach is the go-to method. This method projects out future earnings, based on factors such as future sales growth and profit margins. A risk-adjusted cost of capital is then applied to find the value of those future cash flows. The outcome will determine an estimate for the business value.
For smaller businesses, the “multiple of earnings” valuation approach is often used. This incorporates specific detail regarding business characteristics and the sector your company operates in.
How Ascenum can help value your business
We’ve provided the basics of valuing a business above but as you’ve probably already realized, this process is not exactly straightforward and to get the best possible valuation you’ll need the help of a professional.
If you’re planning on selling your company, or you’re starting to think about where you’ll be financially in five, ten, or fifteen years, don’t rely on ballpark numbers and rough guesses. The result could be you under or overvalue your business. Instead, we recommend you become an Ascenum member.
As an Ascenum member, you’ll have access to leading online business valuation engines. You can use digital online tools to get an accurate picture of what your business is worth without paying expensive fees.
You’ll also get access to a community platform, Learning Center, and Marketplace so you can connect to leading specialists who will help you capitalize, grow, and when the time is right, sell your business for maximum value.
Learn more about how Ascenum can help you find the true value of your company and help you work towards getting the best possible financial return from the hard work and effort you’ve put into your business.