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How to properly value a business

| Nov 16, 2017 | Buying & Selling Businesses |

It is important for North Carolina business owners to know how much their company is worth at all times. Understanding how much a company may be worth today can help when it comes to future growth and tax planning. It may also be helpful when attempting to secure a business loan or when seeking an influx of capital. One way to determine how much a business is worth is by finding out how much its assets may be worth.

Anything that helps a company generate revenue can be considered an asset. Therefore, the value of trademarks or online stores can be counted in this calculation. It may also be possible to determine how much a company is worth by determining how much it could get if it were liquidated. Business owners may also want to determine how much their business is worth by comparing it to other companies of similar size and in similar industries.

Another valid way to find out how much a company is worth is by finding out how much income it produces. Generally, future sales and revenue projections are made based on previous sales and income numbers. This method is generally considered the most reliable, but it may also may take the most time to create a valuation using it.

Knowing how much business assets are worth may help a company remain competitive. This is because such assets may be sold or otherwise used to secure loans or other resources. If a business owner is ready to sell his or her company, it may be worth consulting with an attorney. An attorney may work with accountants or other advisers to confirm the value of assets and help create documents that buyers may want to see while doing diligence.

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