"Often the most difficult step in buying or selling a small business is determining what the business is worth.
Valuation Methods
There are two basic methods of determining the value of a business. The first is based on expectations of future profits and return on investment. This is by far the preferable method, as it forces the buyer and seller to give at least some attention to such factors as trends in sales and profits, capitalized value of the business, and expectancy of return on investment.
The second method is based on the appraised value of the assets at the time of negotiation. It assumes that these assets will continue to be used in the business. This method gives little consideration to the future of the business. It determines asset values only as they relate to the present. It is the more commonly used method because it is easier, not because it is more reliable"
Read more at:
How to Determine the Value of a Business | YoungEntrepreneur.com:
For additional information regarding Florida business sales, acquisitions and valuations, please contact Eric J. Gall at info@buysellflbiz.com or 239.738.6227. Also, visit our Florida Business Exchange website at www.fbxbrokers.com and my personal website at www.buysellflbiz.com.
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