It’s important to note that any two licensed appraisers or prospective investors can read key valuation factors differently. But what is true to all business valuations is the attempt to put a dollar value on a company’s future business potential.
Startup entrepreneurs and well-established business owners should have a sophisticated appreciation of how investors and ultimately business buyers will size up their company’s potential. Sometimes these factors which can influence company valuations are referred to as “business fundamentals” or “investment fundamentals.”
Here are six fundamentals that may influence the value of your business. (For full details, read the article in its entirety here).
No. 1: Revenue predictability.
No. 2: Customer list.
No. 3: High gross margin business.
No. 4: Intellectual property advantage.
No.5: Brand strength.
No. 6: Low debt load.
…an excerpt from “What’s Your Business Worth?” by Susan Schreter for the Small Business Center.