Business valuation is basically the process by which one can determine the economic value of any business entity. It is often used for determining the fair value of any business for a number of reasons, like the sale value of a business entity, the establishing partner ownership of an organization and even the divorce proceedings etc.
1. Income Approach VS Market Approach –
How to Strike the Balance while Going for
Business Valuation?
Business valuation is basically the process by which one can determine the
economic value of any business entity. It is often used for determining the
fair value of any business for a number of reasons, like the sale value of a
business entity, the establishing partner ownership of an organization and
even the divorce proceedings etc. The number of clients demanding
for business valuation of other businesses from a pragmatic lens view has
increased. At least, the client data sheet of Resurgent India testifies this fact.
Gone are the days when business fraternity was moving ahead with intuitions
and recovery guarantees associated with the new business proposals. After
the arrival of the big data facilities, the standards of business valuation have
gone very high.
2. Fair Market Value VS Investment Value – Which
Approach Is Right?
Individuals going for a business valuation often find themselves on
crossroads during the process because they confuse between the fair
market value and the investment value of a business. Let’s consider the case
of Ola Cabs, and many more start-up businesses, when they started their
journey. At that point in time, there were to methods to go for a business
valuation of their proposals. The fair market value of enterprise was very low
at that point in time, because they were not having enough tangible
resources. For instance, Ola was not having an impressive fleet of the cabs,
and they were entering as an organized cab service provider in the market.
From the conventional models of an investment model, it was unwise to
invest in Ola at that point of time if we go by the conventional parameters of
business valuation.
The Thin Line between Intuition and Calculation while
Going for Investment Value
Places like Resurgent India never claim that they know the magical thin line
where intuition and calculation finds a divide during the process of business
valuation. However, our experts are well versed in the art of presenting the
cases and studies related to your business in a fashion where merchant
banks and other institutional investors can have a look at them and
understand your worth in an easy way. While going for the exercise of the
business valuation, seasoned investors want to study data in a certain
sequence. It is a kind of algorithm for them to put your case study on the
merit of a SWOT analysis. Most of the new business entrepreneurs fail in
understanding this need of the investors, and some of the best proposals
find a way in the dustbins or the recycle bins of the investors. Experts working
in Resurgent India can put down a method in your business proposal, and
make it more business valuation friendly.
Original Source: https://bit.ly/2Yls5Fj