Company Valuation: How to value a company
If you’re the owner of a business and planning to expand, you need a company valuation to answer this important question…
“What is my business worth?”
Knowing how to value a company, 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 company. 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 company 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 company 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 company valuation will inform your next step.
How to value a company
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
What is my business worth?
To get an accurate company valuation, it’s not just down to a simple equation. That’s why company valuation calculators are inadequate.
Speaking to an expert who can tie in both your tangible and intangible assets, means you can get a company 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…
At THP, we know how to value a company. 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 company valuation calculator uses, we will account for your business’ brand strength, future projections and customer relationships etc. to give you the most accurate company 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.