If someone were to ask you today, what is the value of your business, then what would your answer be? And how would you come up with your valuation?
The reasons why you may need to know the value of your business include to develop an exit strategy or sell your business or perhaps to seek out additional finance to expand your business via new products or into new markets. There is no doubt that potential buyers, investors or lenders will require you to justify your valuation of your business.
Yes, almost anyone with an understanding of figures can quantify tangible assets minus liabilities and create projections for future business income, but you know that your business is worth more than simply the tangible assets.
You have built a business brand and product brands and have forged valuable relationships with customers and suppliers. You know your business, your products and your market inside out. And how much is the intellectual property in your business worth?
How can you quantify those intangible business drivers to include them in the final valuation of your business?
By looking at your business in isolation, it is very difficult to put a value on those intangible value drivers and almost impossible to justify your final valuation to other parties, who in their own interests will most likely be trying to minimise the valuation.
This is where Gibsons can you help you via a tool called CoreValue which can provide a value estimate of your business. The CoreValue database contains data from tens of thousands of private business sales and the software will compare the specific details of your business against its comprehensive dataset to create a value estimate.
There are 18 value drivers that the CoreValue software use to quantify the value of your business: Growth, Market Size, Market Share, Revenue, Barrier to Entry, Differentiation, Brand, Margin, Customer Base, Company (e.g. Mission, Culture, Practices), Financial, Marketing, Operations, Customer Satisfaction, Management, HR, Legal and Innovation.
How does CoreValue work?
First, you simply fill in a questionnaire which requests some business details and then asks you via multiple choice questions about the 18 value drivers in your business. Then we will provide you with a report that shows where your business fits, and therefore its value, relative to the thousands of business in the CoreValue database.
But not only will this CoreValue report estimate the value of your business, it will also highlight areas for improvement in your business to further boost the value of your business.
Contact Gibsons and speak to one of our experienced business consultants today about estimating and boosting the value of your business.
Thanks to Steve Bryant from QMI Solutions for providing information about the CoreValue database and software that is included in this article.