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Old 6th December 2013, 01:33 PM   #1
mlwhite79
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Smile How To Figure Out Business Worth?

Hello! Does anybody have experience or preference with a valuation tool that could help me understand what a business is worth? Thanks!

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Old 9th December 2013, 07:40 AM   #2
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I believe it would help if you gave some background on the business you are looking to put a valuation on.

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Old 9th December 2013, 11:19 AM   #3
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I'm not familiar with a tool. You need to look at the different approaches that are typically used to value a business. There are pretty standard approaches. For example do a search in google for [types of business valuations]. You'll find different examples such as

-- Asset based
-- Income based
-- Market value

For example if you had a mining company the assets approach might be appropriate. While a restaurant might be based on income or market.

Typically, you'll want to use an expert experienced with valuing business (business broker, accountant, etc). You really have to look at all factors such as the assets, income generated and what the competitive market is for like businesses. Every business will be different. Eventually after a lot of research you have to put a number on it that you are comfortable with and then go and try to get the most for it. I don't know a tool that does that.

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Old 10th December 2013, 02:24 PM   #4
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Are you familiar with any online tools/websites that could help with generating estimates using those approaches?

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Old 10th December 2013, 03:02 PM   #5
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Not exactly. The only thing that remotely comes to mind is www.sizeup.com. It's a tool I'm familiar with because the sba provides it also from their site

Quote:
SBA would like to thank SizeUp for its generous donation of a license to use the SizeUp tool. This license enables SBA to provide free access for small businesses to the information contained within the SizeUp tool
http://www.sba.gov/tools/sizeup


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Old 11th December 2013, 11:32 AM   #6
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I think you should know at least period income/waste and then multiply profit on number of periods of related business are selling(eg X months, X years).

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Old 22nd December 2013, 10:30 PM   #7
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That site is interesting, but has anyone used a website where I could find comps for similar businesses (in or out of my area) -- sort of like an MLS for business?

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Old 14th January 2014, 03:30 PM   #8
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It sounds like you are looking for something that can give you ballpark estimate for similar businesses in your area?

There are a few sites to consider, like Valusource for small business at http://valusource.com/Products/Busin...keholders.aspx

Their service isnít necessarily a legally binding valuation but it may be what you are looking for. A lot of the pros use their higher end stuff, but this is affordable and should work.

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Old 20th January 2014, 05:15 PM   #9
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If you're trying to get an idea of what your business might be worth, you should try bizbuysell.com - they claim to be the largest online marketplace.

You can sift through any of the 50,000+ business for sale listings and take a peak at would people are asking for their business, and what's included in the sale price.

It's kind of like taking a flyer from your neighbors 'For Sale' sign. You see what they are asking for their house, then make some calculations and adjustments, and then you have a rough idea what your house might be worth. (But keep in mind that just because your neighbor is asking $300,000 doesn't mean that's what they'll get, or that you would get that same price)

Here's how you use the free tool:

1) Go to the website: http://www.bizbuysell.com

2) Under 'Find a Business' scroll through the different categories and pick one (Retail, Services, Manufacturing, Construction, etc.)

3) Pick a location (city, state, etc.)

4) Enter a revenue range (i.e. $250,000 - $500,000)

I believe they also have a 'paid service' option that allows you to see actual sales prices of businesses that have sold on their site.

Good luck

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Old 22nd January 2014, 07:13 AM   #10
phanio
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What do you think it is worth?

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