Holmes is a Philadelphia-based business lawyer and strategist who helps emerging and established companies looking to expand, protect their assets and increase their profits in an accessible and realistic way. The Business Insights blog at Harvard Business School Online provides the professional information you need to achieve your goals and gain confidence in your business skills. Valuing your company means that you can tell an investor, shareholder, buyer or banker that the company is worth an amount X; therefore, if you want a Y percentage, you will have to disburse Z. You can provide a growing company with new capital and take advantage of its proven formula for achieve even greater success.
One of the most important parts of a business purchase transaction is to establish the value and sale price of the company. The valuation of a company, also known as a business valuation, is the process of evaluating the total economic value of a company and its assets. The upper limit of the price range would cover any business asset plus expected future profits. For example, negotiating with a small business owner who built their work with love from scratch but who has plans to retire soon will be very different from negotiating with the owner of a franchise or investment firm. However, if you have your historical data, you can often have a financial model drawn up for a small business in about a week or two, said Abir Syed, co-founder of UpCounting.
You want to make sure you get the most out of the new company you're embarking on, and the best way to do that is to have a business lawyer on your side, who has your back and is on the lookout for any unexpected complications. If you only want to value your company based on your own information, keep this information in your records in case you need it for a loan or investment in the future.
