What are the key drivers of the business valuation? The key factors of the business valuation.

1. DRIVERS
BUSINESS
VALUATION
OF
KEY
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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
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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
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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.
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5. Drivers Of Business Valuation
Market Demand
If the market demand for your
business is high then the value
of your business goes up.
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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.
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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.
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8. Drivers Of Business Valuation
Economic
Conditions
The next factor is the
economic conditions
generally. The better
the economy the
higher the price.
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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.
$$$
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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.
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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
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12. Maximise Business Value
For help in maximising your business value
take a look at our products here
http://bc.com.au/maximise.html
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13. For A Free Consultation On
The Value Of Your Business
Visit our website
www.valueabusiness.com.au
Friday, 5 July 13