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DRIVERS
BUSINESS
VALUATION
OF
KEY
Friday, 5 July 13
Factors Influencing Value Of A Business
There are various factors
influencing business value but
before discussing them, you need to
understand that there are various
categories of businesses in Australia
classified according to their size.
The classifications are:
- public companies
- privately held and family small to
medium enterprises
- micro businesses
Friday, 5 July 13
Profit History
Drivers Of Business Valuation
The value of a business
stems mainly from its
profit. Not only current
profit but also historical
profit. Buyers like to see
history of steady growth.
History
Friday, 5 July 13
Drivers Of Business Valuation
The Accuracy Of
Bookkeeping And Records
All the bookkeeping
and financial records
of the business need
to be accurate and
up-to-date.
Friday, 5 July 13
Drivers Of Business Valuation
Market Demand
If the market demand for your
business is high then the value
of your business goes up.
Friday, 5 July 13
Drivers Of Business Valuation
Cash Flow
Another factor affecting the value of
your business is cash flow. Cash flow is
the money left in the business over a
period and must be distinguished from
profit. You can be making good profits
but if your clients don't pay their bills,
you could be having negative cash flow
in the business.
Friday, 5 July 13
Drivers Of Business Valuation
Strategic Value
Strategic value is where a buyer gains
more from buying your business than just
the profit. The two businesses together
create extra value. This could be by virtue
of the buyer gaining a key employee from
the purchase, securing a key product that
it can sell to its database or some other
benefit of the transaction.
Friday, 5 July 13
Drivers Of Business Valuation
Economic
Conditions
The next factor is the
economic conditions
generally. The better
the economy the
higher the price.
Friday, 5 July 13
Factors Of Business Valuation
The Value Of Assets
The next factor influencing the
value of business is the value of
the assets. See elsewhere on this
blog our post on Asset Valuation
Method.
$$$
Friday, 5 July 13
Factors Of Business Valuation
Future Earnings
And Profit
Potential
Just remember that a
buyer will value your
business according to
their belief about the size
of next year's income.
Friday, 5 July 13
For Advice On Your
Business Valuation Or Sale
BCI Business Brokers
Tony Arena (Managing Director)
3/1 Alexander Street, Crows Nest, NSW, 2065
Phone: +61 2 9439 3399
Mobile: +61 411888148
Email: tarena@bc.com.au
www.bc.com.au
Friday, 5 July 13
Maximise Business Value
For help in maximising your business value
take a look at our products here
http://bc.com.au/maximise.html
Friday, 5 July 13
For A Free Consultation On
The Value Of Your Business
Visit our website
www.valueabusiness.com.au
Friday, 5 July 13

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Drivers Of Business Valuation

  • 2. Factors Influencing Value Of A Business There are various factors influencing business value but before discussing them, you need to understand that there are various categories of businesses in Australia classified according to their size. The classifications are: - public companies - privately held and family small to medium enterprises - micro businesses Friday, 5 July 13
  • 3. Profit History Drivers Of Business Valuation The value of a business stems mainly from its profit. Not only current profit but also historical profit. Buyers like to see history of steady growth. History Friday, 5 July 13
  • 4. Drivers Of Business Valuation The Accuracy Of Bookkeeping And Records All the bookkeeping and financial records of the business need to be accurate and up-to-date. Friday, 5 July 13
  • 5. Drivers Of Business Valuation Market Demand If the market demand for your business is high then the value of your business goes up. Friday, 5 July 13
  • 6. Drivers Of Business Valuation Cash Flow Another factor affecting the value of your business is cash flow. Cash flow is the money left in the business over a period and must be distinguished from profit. You can be making good profits but if your clients don't pay their bills, you could be having negative cash flow in the business. Friday, 5 July 13
  • 7. Drivers Of Business Valuation Strategic Value Strategic value is where a buyer gains more from buying your business than just the profit. The two businesses together create extra value. This could be by virtue of the buyer gaining a key employee from the purchase, securing a key product that it can sell to its database or some other benefit of the transaction. Friday, 5 July 13
  • 8. Drivers Of Business Valuation Economic Conditions The next factor is the economic conditions generally. The better the economy the higher the price. Friday, 5 July 13
  • 9. Factors Of Business Valuation The Value Of Assets The next factor influencing the value of business is the value of the assets. See elsewhere on this blog our post on Asset Valuation Method. $$$ Friday, 5 July 13
  • 10. Factors Of Business Valuation Future Earnings And Profit Potential Just remember that a buyer will value your business according to their belief about the size of next year's income. Friday, 5 July 13
  • 11. For Advice On Your Business Valuation Or Sale BCI Business Brokers Tony Arena (Managing Director) 3/1 Alexander Street, Crows Nest, NSW, 2065 Phone: +61 2 9439 3399 Mobile: +61 411888148 Email: tarena@bc.com.au www.bc.com.au Friday, 5 July 13
  • 12. Maximise Business Value For help in maximising your business value take a look at our products here http://bc.com.au/maximise.html Friday, 5 July 13
  • 13. For A Free Consultation On The Value Of Your Business Visit our website www.valueabusiness.com.au Friday, 5 July 13