26 Jul When you want to sell a business in Florida, how do you determine the business valuation?
Determining the value of a piece of real estate is relatively simple. You’ll need to know how big the property is, where it’s located, what kind of condition it’s in and how much similar properties have sold for recently. If you want to sell a business in Florida, however, determining how much its worth is a much more complicated prospect.
Understand What a Business Valuation Is
According to Investopedia, “A business valuation is a general process of determining the economic value of a whole business or company unit.” Notice the use of the word “whole.”
Unfortunately, there is no simple equation that will allow you to calculate the value of a Florida business you want sell or buy. As the experts at Investopedia point out, “Estimating the fair value of a business is an art and a science; there are several formal models that can be used, but choosing the right one and then the appropriate inputs can be somewhat subjective.”
Let’s say you want to put a FL business up for sale. There are a number of variables that will go into determining what the fair selling price will be.
There are many factors that could affect a business valuation, including:
- What type of business you want to sell
- Company comparisons based on financial statements, cash flow models, etc.…
- Future earnings projections
- Market value of all assets
- The management team currently in place
- Capital structure
When Do You Need A Business Valuation?
A business valuation can be important in many different situations. It’s not just when you have a Florida business you want to sell! There are a number of different situations when you might need to determine the value of a business.
As the experts at Investopedia explain, a business valuation can play an important role when:
- A company wants to sell all or a portion of its operations
- A particular business wants to merge with or acquire another company
- It’s tax reporting time!
Calculating a business’s value is a complicated process. That’s why it makes sense to involve an experienced South Florida business broker like Atlantic Business Realty’s Ron Ginsburg if you’re looking to buy or sell a Florida business. For more information, please contact us.