Business Valuation: How to value a business
If you’re the owner of a business and planning to expand, you need a business valuation to answer this important question…
“What is my business worth?”
Knowing how to value a business, means you get visibility on your business’ overall worth, not just the numbers on a spreadsheet. With the information you need to negotiate the best possible deal, you can ensure that you’re agreeing a fair and suitable price to buy or sell.
Equally, if you’re an investor, it’s important you know how to value a business. Valuing a business will give you the security you need to make a safe investment, and will ensure you put your money into the opportunity that gives you the best possible return.
Why do I need a business valuation?
While you may not be making changes right now, you’ll know that not everything in business can be planned. Having an up-to-date business valuation can help you to iron out the path for any unexpected stumbling blocks you may encounter.
If you’re thinking about…
- selling or merging your business
- a change of ownership or welcoming a new business partner
- attracting a new shareholder or board member
- your exit strategy or planning for retirement, or
- the exit of partners or shareholders etc.
…a business valuation will inform your next step.
How to value a business
From annual turnover to plant and machinery, it’s easy to get tied up with physical assets when valuing a business, while the intangible (often the most valuable elements of your business) can go unaccounted for. For instance, the strength of your customer relationships, or having a skilled workforce, are valuable assets that need to be considered when valuing a business.
“UK businesses now invest 20% more in intangible assets than any other asset.”
(Source: HM Treasury)
There are a number of intangible assets that can increase your business’ value…
- Financial performance and forecasted sales
- Strength of brand
- Existing customer base
- Experienced management team
- Strong supply chain
Though popular, online business valuation calculators won’t account for intangible assets. They’re unreliable and often too basic to collect all the necessary information to give a true representation of your business’ worth.
What is my business worth?
To get an accurate company valuation, it’s not just down to a simple equation. That’s why business valuation calculators are inadequate.
Speaking to an expert who can tie in both your tangible and intangible assets, means you can get a business valuation that is in line with today’s market and is representative of your circumstances.
For more information, or for a detailed valuation of your company’s worth, please request a callback below…
What our clients have to say
“THP helped us become more tax efficient and assisted with turning us from a Partnership into a Limited Company” – Mercer & Hughes, Veterinary Practice.
“We liked having face to face contact with a keen enthusiastic manager, and benefitting from advice that made a real difference to our business” – Liberty Games, Retail.
At THP, we know how to value a business. Our team will go beyond the numbers to give a company valuation that is truly representative of your business’ circumstances.
On top of the day-to-day operational costs and profits that a traditional business valuation calculator uses, we will account for your business’ brand strength, future projections and customer relationships etc. to give you the most accurate business valuation.
Speak to THP today to get visibility on your business’ overall worth and to ensure that you’re negotiating the best possible price to buy or sell.