The Northern Virginia benefits consultants at Business Benefits Group released a blog explaining to readers how to value a small business.
Online PR News – 14-March-2019 – Virginia – The Northern Virginia benefits consultants at Business Benefits Group released a blog explaining to readers how to value a small business. Receiving a business valuation can provide business owners with several advantages for future growth.
There are three main ways to value a business, each of which uses different information to establish the business's worth. The asset-based method compares a company's assets to its liabilities, the market value method determines a sale price by comparing your business to similar businesses and their sale prices, and the income method analyzes your company's financial history to determine its stability. Generally speaking, a valuation using any of these methods begins with calculating the seller's discretionary earnings, or the pre-tax earnings of your business before various expenses are accrued. Most companies can be sold for between one and four times this number, providing you with a baseline price. Finally, subtract any liabilities, including debt and late payments, to arrive at your valuation. These steps, in combination with the asset, market, or income method of valuation, result in an accurate representation of a company's value.
Business owners typically undergo valuations when they are considering selling their businesses. While a valuation provides an accurate idea of reasonable sale prices, it can also generate immediate benefits. A valuation can give business owners a better understanding of their assets and liabilities, which they can then use to get better insurance coverage, reallocate funds, or resolve issues with operations. It can also help demonstrate company growth from year to year. This information can be presented to investors to show your company's potential and how their investments will be used to promote the company's growth. Similarly, a valuation can ensure that you receive a fair deal during acquisitions and mergers.
Speak to the brokers at BBG for more information and assistance in valuing your business. The company's brokers are experienced professionals who specialize in small business support and development. Areas of expertise include benefits consulting and technology, business and DBA insurance, executive planning, HR & compliance, international insurance, retirement plans, and wellness solutions. For more information, contact BBG online at https://www.bbgbroker.com/ or by phone at 844-201-3609. The company is headquartered at 4069 Chain Bridge Road, Top Floor, Fairfax, VA 22030.