Business Valuation
The other day I came across a social media site and noticed an old post. Someone was asking a question about how to value a business. Ten people were good enough to answer. I was not surprised when all 10 replied with completely different methods on how to value a business. You have to assume that people taking the time to answer the question were reasonably confident that they knew the correct answer. It made me wonder where they actually got the information from and how much confusion this subject creates with almost everyone including accountants and business brokers. I can hear you asking how to go about establishing the asking price of a business. This is the method a Business Broker will use to determine the asking price of a business. The method below is used by business brokers to determine an asking price for a small business; it is based on the adjusted net profit using the most recent profit and loss statements. The business broker will look at all the business expenses to...