Historic financial reports form the basis of all business valuations, but there is always a wide discrepancy between the theoretical value of a business and its actual selling price.  This is because there are a number of criteria, most of which are unquantifiable in a traditional modelling sense that can radically change the attractiveness of a business.

One key one is its future potential for profits, and involves likely future buyer demand, competition, changes in the value chain and a wide range of other factors. LINK’S sophisticated Valuation Tool takes into account the following weighting factors:

  • Barriers to Entry

Would it be easy for a competitor to become established in this industry?

  • Risk Profile of the Business

Does the business rely on a small number of clients, or relies on the owner?

  • Length of Time in Operation

Is this an established business?

  • Uniqueness of the Business

Does the business have a well-defined niche?

  • Risk Profile of the Industry

What is the vulnerability of the industry as a whole?

  • Location of the Business

Close to major markets for its products and services?

  • Likely Buyer Demand

Is this business likely to attract few or many buyers at the current time?

Through LINK Corporate’s access to a wide range of company sales data, the results are then matched against comparable sale transactions in a similar industry.  This gives a true “market based” indication of the value of a business.  Once sellers can offer a realistic market asking price it increases the chances on a sale.

Victor Whiteley & Mark Ostryn

To arrange a business valuation, please call me on 0411 742 400

More information – http://linkcorporate.com.au/services/business-market-calculating/

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