Why Do You Need a Business Valuation

A business valuation will determine the value of your business and who your potential buyers may be and why they are interested in acquiring your business.

Business Risk Factors -The following is a comprehensive list of risk factors used for valuing larger businesses:

• The length of time the company has been in business
• The length of time under the current ownership
• The number of employees
• The quality/appropriateness of the business location
• Condition and quality of plant and equipment
• The tenure and security of occupancy
• What working capital is needed to fund growth
• Threat of debtor defaults
• Business sales growth (past and future)
• Future industry growth potential
• Desirability of the business (is there a demand for this type of business?)
• Are there management control systems in place?
• The documentation of systems; jobs, procedures, policies
• Quality of the customer base and customer retention
• Level of competitor rivalry
• Advertising requirements
• Geographical scope
• Supplier power
• Buying power
• Threat of new entrants into the market
• Threat of substitutes on the market
• Degree of market focus
• Threat of litigation
• Customer loyalty
• Government regulation
• Owners' working hours
• Owner dependency