Your Fort Lauderdale business is ready to be sold, and you are considering using the proceeds to help finance your retirement or a future endeavor. The market value of your business can be determined in a number of ways. Consider contacting a Fort Lauderdale Business Broker.
Calculate the value of the assets. Calculate the value of all the assets owned by the business in Fort Lauderdale, including its equipment and inventory. Subtract any liabilities and debts. Business balance sheets serve as a basis for determining the business’s worth at least in part. However, the company is likely worth much more than its net assets. Can you forecast revenue and earnings for the company?
You should base it on revenue. What is the annual revenue of the Fort Lauderdale business? Find out how much a typical business in your industry might be worth for a certain level of sales by consulting with a stockbroker or business broker. Typically, it would be about two times sales.
Consider using earnings multiples. Probably a better measure would be a multiple of earnings for the company, or a price-to-earnings ratio (P/E). Please estimate the company’s earnings over the next few years. According to a typical P/E ratio of 15, the company would be worth $3 million if the projected earnings were $200,000.
Conduct a discounted cash flow analysis. As part of the discounted cash flow analysis, the business’s annual cash flow is projected into the future, and the value of the future cash flow is discounted to today using a “net present value” calculation. Online NPV calculators are easy to find and use.
Don’t limit yourself to financial formulas. It is important not to rely solely on numbers to assess the value of a business in Fort Lauderdale. Consider the location of your company when determining the value of your business. In addition, if there are business synergies, consider its potential strategic value to a potential acquirer.