Valuation of a business
“What makes a business valuable is the future that the business can help you reach” Juha Rantanen, CEO, Suomen Yrityskaupat Oy.
Just as there are no identical businesses or buyers, there are no identical changes of ownership either. The value of a business depends of the business itself, the world around it and the buyer as well as countless factors related to the aforementioned.
In practice, small and medium sized businesses’ values are defined in two ways: the business’ capitalized income value and the value of the business’ debt free assets or substance value. Although there are several valuation methods and defining value is demanding work, which should be done by professionals, it is useful to at least be aware of these two methods.
Selling price estimate
The selling price estimate gives a realistic estimate of the price the business could be sold for. It is the best and cheapest starting point for someone planning an acquisition, sale or generational transfer of a business. A selling price estimate is a short, clear and easily understandable estimate of the business’ selling price right now.