Key factors influencing small business valuation

As a business owner, you obviously want to be cognizant of decisions and factors within your business that will positively or negatively influence its value.  Below is a breakdown of some key areas you can focus on today to ensure that your company’s value is protected should you ever need to conduct a business valuation and if you ever plan to sell:

There are certainly many other major factors that will influence the value of a business (goodwill, client acquisition efficiencies, competitive landscape, fixed assets, inventory etc), but some of the above examples you can address sooner rather than later for a positive business valuation.  Know your value, Know your business.  If you have any other tips or advice, please leave a comment.

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3 Comments on Key factors influencing small business valuation »

bapela @ 6:32 am:

i want 2 know factors tha have effects on expenses not on business evaluation

Ken Kaufman @ 10:39 am:

The points in this post are very relevant, expecially the record keeping and removing the reliance the business has on the business owner. A lot of entrepreneurs are proud of the fact that they make their business go. But they have to remember than an outsider will find more value in a business that can go on its own!

Arnold Shields @ 7:36 pm:

Achieving positive trends in the most recent 2 or three years is very important. Business owners should look at a time frame of 2 to 3 years in selling their business in order to ensure that their books show the real picture and develop the business into a turnkey solution.

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