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/