quote from Warren Buffet quote from Warren Buffet quote from Albert Einstein quote from Benjamin Franklin quote from Vincent van Gogh quote from Alan Greenspan quote from Confucious quote from CS Lewis quote from Moliere quote from Thomas Paine quote from Shakespeare quote from Mark Twain quote from Oscar Wilde quote from Adam Smith

Value a Business

How do you value a business? Perhaps we can explain the philosophy a business valuer network associate bases all his valuations on:

"To understand the business from a physical and operational point of view and to understand the business philosophy, the strengths and weaknesses of the business and what will cause the future for the business to differ from a pure extrapolation of the historical past of the business."

In other words, the business valuer will value the business by establishing the future maintainable earnings of the business. This is not necessarily the same as last year's profits. They may be more, they may be less.

There are macro factors and micro factors pressuring the business and aiding the business all the time. Some may be government changes in legislation (just look at what happened to the insulation industry in 2010). Some may be seasonal (just look at what hail storms did to the produce businesses ).

Some may be growing staff shortages (bad) or more tourists next year (good).

So when a business valuer network member values a business he is not just looking at the financials and last year's profit to value a business. You must look at the business from every different angle and reach an wholistic conclusion on how the business will perform in the immediate future given the known risks and the known micro business environment and the known macro business environment.

Do not try to value a business yourself, if you do so you are at risk of forming a wrong conclusion as to the value of a business if you attempt to value a business yourself. Invest in expert business advice, it is not a cost...it is an investment. 

To discuss how you value a business in detail and how a business valuer network associate might value a business such as yours...contact Graham O'Hehir (national co-ordinator) on 1300 634588.