- Six Things that Can Keep a Business from Growing
- Avoiding the Wealth Creation Con Artists
- Why Business Owners Should Think Like Futurists
- 4 reasons to consider refinancing your home loan
- Does your super fund provide enough life insurance cover?
- Succession plan basics for small business
- Matters to Consider Before Setting Up an SMSF
- Should you register for GST?
- Finance options for buying a car
- 7 Useful Web-Based Software Programs for SMEs
- ATO ANNUAL REPORT
- How The Cloud and Automation Make Business Management Easier
- Buying Property? Why You Should Care About Interest Rates
- Buying property through SMSF – what are the rules?
- Big data for small business
- HIFX - INTERNATIONAL PAYMENT EXPERTLY DONE
- Budget Alert – Should you put in place a Transition to Retirement strategy?
- FBT 2016 - WHAT YOU SHOULD KNOW
- How New Laws May Impact Your Use of an Earnout Right when Buying or Selling a Business.
- Transfer of Business Assets & Private Company Shares
- Financial Future Checklist
- 6 Things that Work Better in The Cloud
- Can better inventory management improve business performance for Manufacturers?
- 5 Top Causes Of Stress for Small Business Owners Open page Preview for 5 Top Causes Of Stress for Small Business Owners
- 5 Reasons for Cash Flow Problems in Small Businesses
- Key man insurance, who do you need to insure?
- Buying A Business? 5 Red Flags to Watch Out For
- Should You Take Your Small Business National?
- Upfront costs when buying a home and how you could save
- Insourcing vs outsourcing vs co-sourcing
- Saving Tax Through Successful Loan Structuring
- Buy/sell agreements - do you need one?
- Changes to overseas working holiday tax
- Employment and the 457 visa
- Exciting new service offering at YML!
- Right Corporate Structuring
- Stamp Duty
- Annual Wage Review
- Interest Only Loans
- GOVERNMENT ANNOUNCES CHANGES TO THE WORKING HOLIDAY VISA MAKER PROGRAM
- Federal Budget 2014-15 Update
- YML Insight February 2015
- YML Insight March 2015
- YML Insight April 2015
- 2015 Federal Budget Report
- YML Insight June 2015
- YML Insight July 2015
- YML Insight August 2015
- POWER BI - BUSINESS DATA TOOL
- The Importance of Estate Planning
- Tax Time Checklist for Individuals
- Federal Budget May 2016 - Superannuation and Social Security
- SuperStream Deadline for Small Employers
- Land Tax Surcharge and You
- Tax Liabilities to be reported to Credit Agencies
- Business Process Improvement
- Business Valuation
- Prepaying Interest
- Superannuation Contributions at EOFY
- Financial Year End Planning
- How Business Process Outsourcing can bring value to your customers through technology
- Equity Crowd-Funding
- Mortgage Insurance
- 457 Visa
- Insurance in Super
- GENERAL SKILLED MIGRATION (GSM)
- Super Guarantee – What Happens When You Get It Wrong
- Business Process Outsourcing – Take the Technology View
- The Importance of Estate Planning
- PRINCIPAL-AND-INTEREST VS INTEREST-ONLY
- UPDATE YOUR WILL
- SAFE HARBOUR FOR DIRECTORS OF STRUGGLING COMPANIES
- PENDING 457 VISA CHANGES in MARCH 2018
- REMINDERS! LAND TAX REGISTRATION and DEED OF VARIATION
- UPDATING SMSF TRUST DEEDS
- SMSF - $1.6 MILLION TRANSFER BALANCE CAP
- CONTRACTOR vs. EMPLOYEE – EMPLOYER OBLIGATIONS
- RPA for VEHICLE FLEET MANAGEMENT
- TRUST DISTRIBUTION IN 2018
- TAX PLANNING
- THE IMPORTANCE OF WITHDRAWING YOUR MINIMUM PENSION
- AUDIT INSURANCE – ATO Increasing Audit Activity in the Areas of Income Tax and Supe
- What does the NEW 482 Visa mean for your business?
- GST on Property Transactions has changed from 1 July
- YML MIGRATION – WHAT CAN WE DO FOR YOU?
- INVESTMENT LOANS – IS IT WORTH TAKING OUT PRINCIPAL + INTEREST at 3.89% RATE*?
- GLOBAL TALENT SCHEME – Get the expertise your company needs…
- It’s started – Single Touch Payroll (STP)
- CAR LOAN – HERE’S AN OFFER
- Over 65? Downsize your home to contribute to your super!
- NEW Skilling Australians Fund (SAF) Levy
- Superannuation Guarantee Amnesty – Self-Correct your past Super Guarantee Liability
- Non-Residents and SMSFs – Tax Alert!
- Proposed Partner Visa Changes – NEW Two-Step Process
- Should I ‘fix’ my home loan?
- Working with Remote Staff – Business Process Outsourcing
- ATO Payment Arrangements – Avoid Overseas Travel Ban
- Taxable Payments – New Compliance for Couriers and Cleaners
- Government announces Changes to the Working Holiday Maker Programme
- NEWS! CGT Main Residence Exemption to End for Foreign Residents
- BUY / SELL Insurance – What is it and how can it help your business?
- Working from home: What deductions can you claim?
- Applying For A Mortgage Is No ‘Walk in the Park’
- Other Topics
- WORK RELATED CAR EXPENSES - WHAT'S LEGAL?
- WHAT IS THE BEST WAY TO PAY OFF YOUR DEBTS?
- Business Protection Insurance
- Aiming to Make a Final Non Concessional Superannuation Contribution for 2016? Be Careful!
- Getting Organized and Planning Effectively This EOFY
- New Withholding for Non Residents
- Four Per Cent Stamp Duty Surcharge for Overseas Investors Buying Residential Real Estate in NSW
- Co-Sourcing: An Alternative To Out-Sourcing
- What Small Business Expenses Can You Claim?
- Israeli Tax of Trusts
- New Superannuation Rules
- YML Group App - Coming Soon
- Obtaining a Business Skills Visa
- Quick Tips to Pay Off Your Mortgage Sooner
- FBT on Christmas Gifts and Tax Deductibility of Christmas Parties
- Changes to the Assets Test for Centrelink Aged Pensions from January 1st 2017
- Why You Should Consider Co-Sourcing for your Business
- Is It Worth Fixing Your Loan?
- Co- Sourcing
- Shareholder's Agreements
- FAMILY TRUST DEED VARIATION
- ENCOURAGING NEWS FOR Permanent residency (pr) APPLICANTS
- TSS has replaced 457 Visa Program – What is TSS?
- Introducing YML Migration
Do you know what your business is worth? Made you think, right? There are many ways to accurately measure the value of a business, and it’s important to know the best way to assess your business – plus the actual value, of course. As you may have guessed, this isn’t the most straight-forward process in the world. So, why does this matter?
What is a business valuation?
In the most basic sense of the term, a business valuation is literally a way to figure out exactly what your business is worth.
So how is this so complicated, I hear you asking. Well, many people measure the worth of a business in different ways. It’s not necessarily all about the profit. Some people value community contribution greatly, where others might believe historic profits are more important than projected profits.
A business valuation is a process that takes all these sorts of variables into account, and provides you with a better picture of where your business value and worth sits.
Why do I need one?
We know that life is a constantly changing experience, and having a baseline for your business worth will help you assess your position in a changing economic climate.
Knowing where the business market is trending against the job market will assist you in deciding whether it’s wise to consider selling your business, and give you a good idea of where you sit with your competitors.
A business valuation will also help you to decide on how much effort and/or investment is required in branding your business, or undertaking other activities to boost its value.
Okay, I’m convinced. How do I do this?
Step number one is working out how to best calculate your specific value variables. It’s probably wise to do this with an accountant, financial planner, or business specialist. You’ll want to look at data for other, similar businesses – things like how much businesses in your area or specialisation have bought or sold for in the past few years, and other market variables. A financial expert will have access to this sort of data to assist you.
Step number two is selection of a valuation method. This is also best done in conjunction with a financial expert, as it can be a pretty tricky endeavour. There are a couple of main ways that valuation is undertaken though, and these are:
- Net Worth
- Return on Investment (ROI)
Net worth is exactly what it sounds like. What’s the difference between what you owe, and between what you own? There’s your net worth. The tricky bit of this method is figuring out exactly how much your intangible assets are worth – things like intellectual property are hard to put a number on. This method also fails to take into account things like a clear trend for strong business growth, or conversely, a declining profit margin.
Return on Investment looks at a business’s annual net profit. How much are you bringing in this year, and how much have you been bringing in over the past few years? If that trend is looking good, some potential buyers might decide your business is worth paying above market price…except this method doesn’t necessarily take that into account. Net profit is more about looking at the security of the business than its potential for exponential growth or loss.
The complexities of the different valuation methods mean you may need to use more than one method – and that an expert is best positioned to help be define the real worth of your business.
How can YML help?
Talk to your YML Business Advisor today to see how YML Group can assist you with your business valuation. Contact us on (02) 8383 4400 or by visiting the Contact Us Page