As it may sound, you may be looking for ways to value and calculate your business not because you are going to sell it off soonest but rather to know how far you've gone and how really your business has grown from the early stage of its establishment.
What else, it is a genuine way of calculating the growth and evaluating your business to determine whether or not the business has been producing a better output since its inception or the business has been a liability on the neck of the owner.
Be informed that worth and value of a business isn't a straight jacket figure, in fact, it's not a science that can easily without stress be calculated and supplied; as such, it is an art which is more of a subjective figure. Of course, it's alright to do the calculation of your business, assets and liabilities so as to get a glimpse of what the business is actually worth.
Here are however, the surefire tips that will be of great help to you to know and calculate how much your business is really worth;
1. Take inventory of your all equipment and office use
The first thing you are required to do in other to know the value and worth of your business is to take the inventory of your business equipment including the furniture and all other office use that contain within.
Though all this may have value depreciation, but very imperatives is it for you to take inventory of them all to know where to start in case you may want to sell off the business in the future.
2.Summon buyers to know the cost prices
As simple it may sound, another way to calculate and know the value of your business is to summon different buyers to know what they are willing to pay to acquire the business.
For instance, you can place a price tag of $20 million on your business and invite different buyers to know what they will be able to pay, if it's been price to $25 million then that's what it worth and if the reverse is the case, and being price to $15 million, that's the worth and value of your business. Take note!
3. Assets valuation
Another surefire process you can follow if you want to know the worth and value of your business is to value the assets of your business. However, taking a clue from a pure business perspective,
the value of a business is not about multiplying the annual adjusted net profit- I.e profit before tax -by a profit multiplier. But it is the total amount a buyer/buyers is/are willing to pay to acquire such business or the amount that satisfied you or willing to sell the business.
Tell me, If a business worth is just about the assets and liability, where will the profit generating potential of the
business be placed? for this reason, the worth of a business is dependent majorly, on who is valuing the proposed business and what were able to be valued as such, be diligence and patients while doing your calculation.
4. Cash Flow and Profits generation
Another way to know the value of your business is by considering the cash flow of the business. Look inwardly and value the business base on the profit the business will be generating in the future.
5. Meet the Professionals
You could figure out how much is your business worth by hiring the professional/expert on the field to do the valuation for you.
So far you are not competent and did not have the knowledge or skills to do the require calculations, it doesn’t require you to break your jaw over the course or take a college degree to acquire the skills.
By hiring an expert on the field, you will need to pay there bill for the work done. If you adhere strictly to them, they might go extra mile to tell you what your business may worth comes 10-15 years.
Above all, it's ideal you work towards keeping and building your business to reach a world class so that it will be well priced. Know that deligence, hard work, focus, constant research and host of others are what you are to put in place to make your business worth while.