If you are like other business owners, you may be under the impression that valuing your business is just necessary when you want to sell it. Although valuation is important in terms of selling, it can help to know your business valuation because of other reasons such as business expansion, business insurance, investor attraction, loan application and more. Throughout the valuation process, you need to have some pieces of information on hand.
The following information is what you need to determine the value of your business:
Origin of your Business
Your business may have come a long way since its inception. Undoubtedly, it is evolving in the years to come. Whether you are planning a business for sale UK or looking to attract new investors, you must understand the value of your business, you will need to keep records of your business origin, journey, and goals.
Details of your Employees
You need to have a thorough record of your employees. You will need this information when looking to change hands with buyers. With the record on hand, your possible buyers will know the job descriptions involved, pay rates, special skill, and staff morale.
Pay attention to the leave entitlements of your current people and determine how your sale will handle this. Also, identify major employees. In case these employees leave your company, how will your operations be affected? This type of information will have an effect on valuation.
Financial Information
This information includes asset market values, profit margins, annual turnovers, and an evaluation of your tangible assets. These pieces of information can help valuers know a bit about your business’ liabilities and where you are thriving.
Commercial and Legal Information
Information on your commercial contracts, licences, lease arrangements, registrations, and permits can also affect the value of your business. It is important for you to offer proof that your business complies with relevant health, environmental, and safety laws. Also, you should disclose any pending or current legal proceedings. Consider getting professional advice about location exclusion clauses which are likely to impact your business.
Market and Industry Information
Look at your industry objectively and consider both short-term and long-term outlooks. Also, think about the way your industry is shrinking or growing. Take your competitors into account and your competitive advantage in the market. Such factors have an influence on the value of your business. Take the time to evaluate this kind of market information to be aware of prices that other businesses for sale are being advertised for.
Comments are closed.