What’s Your Business Worth? There are a few different methods of business valuation. Each of these methods has its pros and cons. Listed below are some of the most popular and effective. However, remember to check out the sources of data before relying on one method. If you have a question, ask a qualified business valuation expert. They will be happy to help. Here’s how to find out your company’s worth.
First, you should calculate your revenue. This is a simple way to determine your business’ worth. If your business has a revenue stream of $100,000, then its value is equal to $100,000. But don’t confuse turnover with profit, which is earnings after deducting expenses. You should compare your turnover to your net profit and gross profit to get a better idea of how healthy your business is. If your revenue is more than ten times what your business is worth, then you should make the appropriate adjustments.
Another way to figure out your business’s worth is to use revenue as your basis for valuation. If your business generates $100,000 in annual revenue, then it’s worth $100,000. Many businesses are valued based on a multiple of revenue. Depending on the industry, you can consult with a business broker to learn what your industry’s average sales multiple is. When using this method, keep in mind that you should compare the revenue of your business to your profit.
