Business Valuation is Critical
What is Business Valuation?
Aspects of Valuing a Business
When the business is for sale, the price the seller wants is usually never the price received. This is because the seller's perception of the value is usually much higher than the buyer's. The final price is usually in between because the buyer and seller will negotiate an agreed figure.
Value against Ability to Make a Profit
In general, a business should be valued against the ability it has for making profits. Other factors, such as the ability to generate good cash flows, or the consistency of profits, or a potential for growth and the lack of competitors, will have an effect on the price. Because each business is unique, it is important to use the most appropriate valuation method that does justice to the particular business and it's potential.
Finding True Worth of the Business
From the buyer's point of view, buying a business is an investment decision and, as with any other investment decision, the net worth or value will be based upon the ability of the business to provide returns.
These returns are represented by the profits the business makes, so the value of available profits will have a bearing on the net worth (or price) finally agreed to by both parties. An area that requires special attention is goodwill.
Goodwill has many definitions, but one of the simpler explanations for goodwill is; it assumes that because the business has been running with an established clientele or customer base for some time, the clientele or customer base will keep coming to the business for their requirements, thus creating a value known as goodwill.
Price based on Asset Values
For example, the assets would be valued in the books of the business at a different valuation than in the current market. Some assets (such as computers), may be in the business books at $4,000 being the original cost less depreciation, and yet because of the advancement in technology, that same computer could now be worth half that.
A potential owner will therefore only be prepared to pay market value, rather than the original cost, less depreciation. Another intangible asset valued is known as goodwill, (already explained above). Also, another asset, (which can be termed intangible) is intellectual property.
Intellectual property relates to the patents, trademark and other trade secrets and designs, which are owned by the business. Because they are unique to the business they have value.
StartRunGrow (http://www.startrungrow.com) is a global online information organization that specializes in creating, developing and marketing business help information specifically with the aim of "making business easier" for entrepreneurs around the world. The StartRunGrow objective is to become a dominant player in the business help arena providing end to end solutions for the millions of small and medium businesses worldwide who continue to struggle daily with the difficulties of starting, running and growing a successful business.
Do I Have to Do EVERYTHING Myself?!
The air in my client's office nearly crackled with her irritation. A scheduling snafu had left a client without important services. "I guess I just have to do everything myself," she ranted.
But Weve Always Done It This Way
Sacred cows take a long time to die. We get comfortable in the way we do things and lose sight of how they could be improved. Here's an interesting story.
Debit and ATM Card Advice for Small Businesses
Your business account comes with an ATM, Debit card. Pick a really secret pin number. Don't give it to anyone even in an emergency. Make sure you record withdrawals. If you have a bookkeeper paying your bills for you, be careful because they won't know that you took out money. They will be upset and so will you and your vendors if they mistakenly write a bad check to pay a bill because you forgot to tell them of your numerous unrecorded withdrawals from the ATM machine.
Effectively Completing the Operations Plan Section of Your Business Plan
The Operations Plan is a critical component of any business plan as it presents the Company's action plan for executing its vision. The Operations Plan must detail 1) the processes that are performed to serve customers every day (short-term processes) and 2) the overall business milestones that the company must attain to be successful (long-term processes).
Small Business Success: Thriving During Change (And Landing On Your Feet!)
If I had $1.00 every time I heard someone say " I don't like change or, change makes me uncomfortable" I'd be a millionaire. Some people thrive on change ? they love it and even create more of it. Others view change with anxiety and resistance. So often, we don't associate potential, excitement and wonder with change. Instead, we react to it; we try to control it; we create situations and problems to avoid dealing with it. We experience change daily in many forms ? the clothes we wear, the food we eat, the conversations we have, traffic patterns, the WEATHER.
Cleaning Grain Silos, Towers, Containers, and Combines
If you run a pressure washing company in a rural market you will need to learn how to wash agricultural industry equipment and infrastructure. In our company The Tractor Wash Guys, we We have several years of experience washing combines. Phil Hasenhoehrl, a wheat farmer in Lewiston Idaho, was raised in the farming business. His family has been farmers for over 100 years. In addition to farming, Phil has worked with us and helped us in learning how best to develop this market sector. He was before joining our team a farmer. He owns a $250,000 John Deere combine that he maintains himself.
Reduce Stress, Increase Profits By Incorporating Strategic Systems In Your Small Business Success
Whether you are an Entrepreneur or Business Professional there are many things you do each week that would benefit from a strategic system to help you be more effective, reduce errors and stress, help you enjoy your time at work and give you more time to have fun outside of work.
How Your Habits Control Your Small Business Success
Habit: A consistent behavior you perform so frequently that it is automatic.
Six Essential Skills to Business Success!
The following are six essential skills to business success. You may not have developed all of these skills, but like most things in life, you can by learning, practicing and determination. Implement these skills and you'll be on the right track.
Fleet Washing Operations Manual Sample Outline
In the Truck Washing Business every single type of vehicle is washed differently. If you are going to run a mobile onsite fleet washing business with multiple trucks in multiple cities you will in fact need a comprehensive manual to keep your crews and equipment running at an optimum. Below you will see a sample outline to assist you in constructing a washing procedure manual, which will include many different types of fleet vehicles.
There Are No Dumb Business Questions, Not!
Q: I'm curious. What is the dumbest business question you've ever been asked?-- Norris W.
Collaborative Negotiating: A Win-Win Strategy
Employee Email and Internet Use - A Small Business Guide
A Portable Trade Show Exhibit Makes for an Easier Show
You can make your trade show experience much easier by using a portable exhibit. Since you control everything related to transporting it and setting it up, you won't have to hire firms to for those things for you.
Secrets of Cleaning Truck Trailers in Your Fleet from a Veteran Truck Washer
Cleaning the trailers towed by big trucks is not easy, those big forty-foot to fifty-three foot boxes are quite intimidating up close when you are holding nothing more than a brush and pressure washer gun, looking at a soap bucket. The hardest thing to do is to clean the back doors of trailers because they get really greasy from all the debris and stuff the truck has driven through. When they run through bad weather areas, they get even dirtier. Pay special attention to rear doors on trailers. Sometimes you'll have to brush them twice. You may even have to do them three times until you get them right. Use a harsh soap or degreaser and watch for left over dirt around the tubular bars that act as the door locks and sealing mechanism. Now on the top of the sides of the trailer you'll have lots of soot if you have a tractor that's been leaking or maybe has a small oil leak or an exhaust problem. This leaves this big exhaust stain down the side of the trailer from the exhaust stack on the tractor. This is a problem because it is hard to clean and you need to clean it. So sometimes you will have to stand on top of the tractor and brush downward. This is done because you cannot get enough leverage from the ground. You may need to pour cleaner directly on your brush or you may need to put cleaner directly on the sides of the trailer. You may need to do both. Make sure the brush is really wet and then set the nozzle on the spray bottle for a steady stream. Spray with the wind and shoot the spray up to the top of the trailer and kind of saturate it a little bit. Then brush it. Now it should be able to come clean. Make sure you rinse really well; otherwise you'll have soap streaks running down the sides. These will be black soap streaks because they will have some of the exhaust mixed in with the soap.
Boat Detailers; Add-on Products and Services
As a Boat Detailing Specialist, you may want to offer services such as making sure your clients' boat's batteries are charged and offering to charge them or test the boat before they arrive for their departure. This is an easy service to provide and will keep you on the top of the boat owners list of reputable and reliable service companies. Battery Chargers can be purchased at:
6 Steps to a Successful Medical Spa Expansion
According to the American Society for Aesthetic Plastic Surgery, since 1997, nonsurgical procedures have increased by 471 percent. Jeff Russell, CEO of MedSpa Financing, comments "Medical Spas are a natural progression of medical practice expansion, having a medical doctor run them gives them the credibility and public confidence needed for their success."
Self-Employment: Managing Your Money: Tips for Living with a Fluctuating Cash Flow (Part One)
The way you manage your money is one of the first things you'll change when you move from employment to self-employment.
Marketing Your Small Business with Success Stories
-- The One Pager Shortcut Series --
3 Ways To Make Certain Your Business Fails
Most small businesses incorporated in 2005 will fail by the year 2007. No matter the industry or the economic times in which the company was initially conceived, the fact remains that businesses fail on a daily basis due to general lack of knowledge and know-how. What follows are my opinion on three very common methods to ensure not only mediocrity but failure as a business entity in today's world.
|© Athifea Distribution LLC - 2013|