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Transcript:
00:00:00 – 00:01:29
hi my name is Tony do and I’m a business dedication attorney here at Focus [Music] law are you think about selling your business if you are preparing for a sale or acquisition you are probably wondering one crucial question and that is what uh is your business really worth getting the right valuation isn’t just important it’s crucial to ensure that you get a fair price and don’t leave money on the table today I’m going to walk you through exactly how to determine your business True Value now
00:00:49 – 00:02:26
let me start uh by explaining the main ways that we can value your business in first uh there is what we call the income based valuation and this works especially well when your business has a predictable uh cash flow uh and with this method we can look at your future earning potential and calculate what is the worth today or we can also use your current earning uh to determine the value another approach is to uh look at the market think of it like selling a home uh we look at the similar businesses that have been sold recently
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and get idea of what kind of multiple uh that they put in their valuation for example if a business in your industry typically selling for three times of their earning that gives us a solid starting point uh for your valuation now for business with significant asset maybe you own property uh equipment or uh variable inventory we want to factor those in as well we call this in an asset based valuation and it’s particularly important in Industry like manufacturing and Retail now one of the most common
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method we use involve earning multiples we look at a your uh net income or what we call ebit a and that is your uh earning before taxes interest depreciation and amortization then we apply an industry uh specific multiple to arrive at your value now let me share something crucial one of the biggest mistake that I see business owner make is mispricing their company what do I mean by that uh pricing too high you scar of the serious respire pricing it too low you could leave enormous amount of uh money on the table even if you are
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really good at running your business you are very excellent at it valuing it objectively requires a different set skill and that’s why we strongly recommend working with expert on this one during this process right uh and good financial advisor who understand the market Trend a business buiness appraiser who specialized valuation or merg and acquisition attorney attorney who can uh structure uh your deal and these professionals that can uh be worth their goal so with that being said another
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important tip don’t just relying on one valuation method and why is that cuz the most accurate evaluation combines multiple approaches right uh we want to look at your future profit potential we want to compare your businesses to similar sales uh in the market and also factoring in uh your business assets with this comprehensive approach that give you the confidence that you need when you are sitting at a negotiation table remember if you are preparing to sell uh your business you can leave your uh valuation to guest
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work and accurate valuation is the role map to maximize your exit strategy and making the right financial decision for your future don’t navigate this journey alone I mean it’s a very complicated process uh many times we work closely uh with different Financial experts uh in this type of transaction and a business theer who help us uh to go through these crucial transactions reach out to us today for a consultation and let us make sure that you get the best possible outcome for your business sale
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This transcript was AI-generated.
