How to Value Your Business

- For All It's Worth

Business valuation is more than just knowing how much a company is worth. Looking at the factors that affect business valuation can give you insight into how the company is running and what needs to be improved. Let’s look at the things that increase the value of your company … and can even multiply its valuation by a factor of twenty or more. Let’s do this from the point of view of another company that might be looking to buy yours...

Client Base: If you’ve got customers, your company’s valuation might be roughly equal to its’ turnover. In fact, when one company buys another, it’s often to get access to the customer base.

Skills: If you’ve trained your staff well, you might get a valuation of about two times your turnover. Why? Skills can take years - and lots of money - to acquire. If your company has them “off the shelf” you have a valuable asset.

Systems and Processes: Good systems and processes might get your company a valuation of perhaps three or four times your turnover. It's les…