Business Values Overview

While high value businesses usually enjoy high profits… high profit businesses do not always achieve the best price

This is where we come in. At BUSINESS Capital Value we help achieve business's True Worth when selling, alleviating inevitable price discounting pressures.

A few simple measures NOW can add immediate value to your business.

The capital value of business or private companies is a much neglected wealth building opportunity for business owners.

Optimising Ongoing Business Value

Before investing, buyers judge an investment opportunity by factors that include in addition to profit, sustainability and growth in income, return on assets employed and any other risks to sustainability of income.

Unless fully satisfied, buyers will immediately resort to discounting value, or will simply walk away from a proposition.

Fair Market Value is generally recognised as the "...expected price at which the subject business would change hands between a willing buyer and a willing seller, neither being under a compulsion to conclude the transaction and both having full knowledge of all the relevant facts...".

Unfortunately and especially in the initial stages, 'all the relevant facts' are not presented when the business is first introduced. This can mean that Fair market Value is established thus:

FAIR MARKET VALUE = TRUE WORTH less DISCOUNT

It is both the reality and the perception of risk that must be addressed in advance.

A gap between the reality and perception of risk (natural buyer resistance) detracts from business True Worth. Even if actual risk is lower than perceived risk, investors require a greater rate of return (ROR), which translates to discounting of business value.

If understood and embraced by business owners, a value focus drives the right business decisions on structure, positioning, strategy and business systems with predictable desired outcomes that enhance and support profit and cash flow. The proposition must also be explained adequately.

Unfortunately, all too often the poorly understood benefits of a value focus mean lost opportunities, sub-optimum profits, and the inevitable business value discounting that follows when selling.

Achieving True Worth means replacing discounting pressures with premiums. Price expectations can be exceeded when the right steps are taken in time.

Is your business value optimised?

Do you have a value expectation for your business as of now?
In the eyes of potential buyers or investors, how do your expectations measure up with theirs?
What is the key Value Proposition of your business in the eyes of investors (the primary reason a prospective buyer would consider your business)?
What can be done immediately, to enhance buyer value perception?

Optimising your business value

Understanding the True Worth of your business is the first step to optimising value. A full independent business valuation will provide you with an external objective view of the current value of a business. It identifies any gaps standing in the way of achieving business True Worth.

You are invited to order your FREE report for more information on how to optimise the value of your business. Order now