Small businesses are the backbone of our economy, but they don't have the resources to access sophisticated valuation tools.
An independent appraisal by a trusted third party can help you determine your small business' worth and establish a baseline as you seek financing or consider sale options.
Factors that influence Business Valuation in Auckland:
- Business and industry
The industry you're in can have a significant impact on your Small Company Valuation. To determine this, you'll need to consider:
- Industry trends--What are the biggest challenges facing your industry? How will they affect your company's growth and profitability over time? Are there any opportunities for new products or services that could help you gain an edge over competitors?
- Industry growth--Does your industry have room for more players (e.g., new entrants)? Is it growing rapidly enough that even if there aren't any new opportunities available yet, they may emerge down the road as demand increases?
- Your company's location
The location of your business is a key factor in determining its worth. This is especially true if you're looking to put your business for sale in Tauranga, as most buyers are looking for businesses that can be run from their home base.
The higher the cost of living, the more valuable your company will be--it means there are fewer competitors and customers nearby who could use another service like yours.
- Your company's history
You might think that the number of years you've been in business is the most important factor in determining your business valuation Auckland, but it isn't. As a matter of fact, other factors are much more important than how long you have been around. To determine what your business is worth, consider these factors:
How many customers do I have? If you are just starting out and don't have any customers yet or only one or two clients who don't really matter to the survival of your business (like maybe an uncle), then this will not be an issue when determining value.
- Your company's cash flow
Cash flow is the difference between your income and expenses. It's also a key factor in determining the value of a business, as it measures how much money a company has to spend on day-to-day operations.
If you're looking to list your Business For Sale Tauranga, you'll want to make sure that its cash flow is strong enough to support itself while it goes through the transition period of being under new ownership.
- Your company's assets versus liabilities
The first thing to consider when determining the value of your small business is the difference between your company's assets and liabilities. Your assets are the things that you own, like equipment, furniture and supplies.
Liabilities are bills that haven't yet been paid for items such as utilities or rent payments. The difference between these two numbers is what you have left over to pay off with after subtracting all of your bills from income earned by selling products or services.
Conclusion
We hope this article has helped you understand how to determine the business valuation Auckland of your small business. Once you know what factors affect its value and why, it's much easier to make decisions about selling or keeping your company. If you're looking for more information, connect with us!
