free small business advice & information
Main Menu
Hot Links
Page 2 of 10
Valuing a Business
1. Why Value the Business?
There are four main reasons for valuing a business.
1.1 To help you buy or sell a business.
Understanding the valuation process can help you to:
There is a better chance of a sale being completed if both the buyer and seller start with realistic expectations.
- Improve the business' real or perceived value.
- Choose a good time to buy or sell.
- Negotiate better terms.
- Complete a purchase more quickly.
1.2 To raise equity capital.
- A valuation can help you agree a price for the new shares being issued.
1.3 To create an internal market for shares.
- A valuation can help you to buy and sell shares in a business at a fair price.
1.4 To motivate management. Regular valuation is a good discipline. It can:
- Provide a measurement and incentive for management performance.
- Focus management on important issues.
- Identify areas of the business which need to be changed.
Labels: Buying/Selling a Business
Related Articles
Monthly Prize Draw!
Win £375 worth of advertising for your business.
Enter our competition by either:
- Signing up to the is4profit Small Business Newsletter or
- Entering your firm's details into the Small Business Directory