Small Business Valuation

Calling an expert to carry out small business valuation is an important exercise if you plan to sell or buy a small business. Brenda Bernhard, CBB (Certified Business Broker) is the expert you need when you wish to carry out a small business valuation. These days, it has become necessary for virtually every small business to calculate the value of the business for a variety of purposes, which include small business valuation for loan applications, estate planning, and the calculation of net worth. Brenda Bernhard is the go-to expert when it comes to accurate and timely small business valuation. There are a variety of methods used for valuing businesses: " The rule of thumb method " Asset valuation " Industry average valuation method

The Rule of Thumb Method The rule of thumb of small business valuation involves a factor or multiplier which is used in order to calculate the worth of the business. This is calculated based on profitability figures or cash flow. The determination of the multiplier is also referred to as "Earning before Interest and Taxes" (EBIT). The business's cash flow and profitability can also be calculated by a method known as "owner benefit." The "owner benefit" determines the discretionary cash flow that a small business would expect in a period of 12 months (one year). Discretionary cash flow helps ascertain the position of funds that would be available for paying off business costs and generating profit.

Asset Valuation Method Asset valuation is a small business valuation method that involves dealing with businesses that are "asset driven" such as wholesalers, manufacturing companies, retail stores, etc. This small business valuation method depends on precisely ascertaining the value of the assets in a business. In order to determine the value of the small business, asset valuation is added to the owner benefit.Industry Average Valuation Method Under this particular small business valuation method, a study is carried out on a business that is in similar industry and has been recently sold. This small business valuation method will help the small business seller to get to a ballpark figure for approximately calculating the true value of the business. In general, some of the factors that can affect the evaluation are quality of asset, entry barrier, location, etc.

Smart businesses generally employ the services of a professional such as advisors, chartered accountants or brokers to advise them on the selling and buying of a business, and a Certified Business Broker is the right person to assist you with every step of the process. A broker such as Brenda Bernhard will ensure that you make the very best buying or selling decision, which will in turn fetch you the best ROI (return on investment). Brenda is a trusted expert who can help you with small business valuation - assessing opportunities, estimating the return on investment and also negotiating the transaction with the business buyer or seller. It makes perfect sense to choose Brenda if you want to get the best result!