A business valuator is a person who business owners get in contact with when they are ready to sell their business and what to know what price to list it for. The owner can try some calculations to figure out the value themselves. However you try to figure out the value it isn’t an easy task. Many books have been written about this topic. If might even be difficult to find who experts that value the business at the same price.
The questions remains how do you find the value of an existing business? Below are some tips.
Basis sales: this method uses the sales figure as a way to value the business. This is usually the best method for a business that is service based. Such businesses can include PR firms, agencies and insurance brokers. There are business specific multipliers that you can use to multiply with the annual sales figure that can get you to a selling price.
Profit basis or cash flow: In this method the sale price of the business can be found by how the business can generate a stream of cash flow or profit. Projecting the revenue over 5 years or longer a business valuator can use this figure to find the net worth of the business. Interest rates will also be a part of this because the profits are projected.
A consultant or business valuator can tell you the best and most accurate way to calculate a good and fair sale price of your website. They have information about the factors that can affect the multiplier and they can figure out the current state of a business. They are better at coming at the right price.
