Local Business Coach Helps Assess Business Value
If you’re in the daily grind of building a business as its owner or leader, the value of your company might not be something you think about often. While valuation isn’t typically a point of concern unless there is some type of transaction occurring, the value of your business can play a major role in many facets of your operation.
As a business coach, my clients ask about valuation often and I am happy to provide insight. Business coaches work to help their clients reach their professional goals, and aside from valuation I work with companies all across South Florida to help them with marketing, strategic planning, policy creation, exit strategies and much more.
In today’s article, I will focus on valuation. In the sections to follow, I will answer some of the most common questions I get about business values and hopefully provide some insight into how working with a business coach can increase the value of your company.
Why is Business Valuation Important?
The value of your business is an important indicator of how well you are performing, but it can serve several other purposes as well.
- Financing: If you’re planning to expand, the value of your business will determine the amount of money you can borrow and will significantly impact important loan terms like down payments, interest rates and more.
- Planning: Knowing your business’s value helps you understand your place in the market and should be at the forefront when determining which steps to take in the future.
- Selling the Business: This one might seem obvious, but understanding what your businesses truly worth is key to getting a fair price in the event of a sale.
- Ownership Transfer: If you are splitting up ownership of the company in any way, even if it’s an internal transfer due to exit planning or promoting of an employee, you should know the business valuation before doing so.
How Do I Calculate My Business’s Value?
Different businesses calculate their value in different ways, which can vary due to the size of the company, the field they operate in and their mix of assets. In general, business valuation can be calculated in a few different ways. Many companies determine their value based on their total assets versus liabilities, which gives a full picture of their worth. Other times, the business is compared to similar companies which have sold in the area. For businesses with a steady income stream, sometimes the assets are overlooked and the total income amount is considered.
How Do I Increase My Business’s Value?
Put simply, the best way to increase the value of your business is to increase your income and decrease your liabilities. This can be done in many ways, and there is no overnight solution. Working with a business coach is a great way to identify ways to control expenses and increase revenue, and it’s my passion to help my clients increase their value and reach their business goals.
If you want to learn more about business valuation and how coaching can help, give me a call or fill out the form on my website to get started today.
