How Business Valuations Work

How Valuations Work

So How Business Valuations Work?

Valuing a business is an art and a science. There are numerous methodologies available. Industry professionals go to great lengths trying to get to the “right” answer.

Here’s the secret though: with how Business Valuations work there is no “right” answer. There is simply a valuation range that financial experts would consider to be reasonable. The purpose of a valuation is to anchor a negotiation or to measure wealth creation.

Ultimately, the true value of something is the price agreed between a willing buyer and a willing seller. But if you aren’t familiar with the concept of valuations, how do you even know where to begin?

As complicated as this sounds, there’s an 80/20 principle in play. An 80% accurate valuation can be achieved with 20% of the potential inputs. Most importantly, it can be achieved at literally a fraction of the cost of hiring a team of experts.

Visit our Insights page for podcasts and articles explaining more about the valuation process and our engine.

Get Started What Problem Do We Solve?

Ultimately, the valuation of a business depends on a few key factors:

Age, size, industry and operating region

Existing revenues, expenses and profits

Expected growth in profits

Required investment in capital expenditure and working capital (like debtors and creditors)

Fixed assets owned by the business

See How it Works

Peek behind the curtain and see how the bizval tool works in this video. Using the example of a pizzeria. The Finance Ghost takes you through each of the questions and shows you what the final report looks like.

You may end up feeling hungry and you’ll certainly end up feeling inspired to value your business with bizval.

View Example Report

Valuing a business is an art and a science. There are numerous methodologies available. Industry professionals go to great lengths trying to get to the “right” answer.

Here’s the secret though: there is no “right” answer. There is simply a valuation range that financial experts would consider to be reasonable. The purpose of a valuation is to anchor a negotiation or to measure wealth creation.

Ultimately, the true value of something is the price agreed between a willing buyer and a willing seller. But if you aren’t familiar with the concept of valuations, how do you even know where to begin?

As complicated as this sounds, there’s an 80/20 principle in play. An 80% accurate valuation can be achieved with 20% of the potential inputs. Most importantly, it can be achieved at literally a fraction of the cost of hiring a team of experts.

Visit our Insights page for podcasts and articles explaining more about the valuation process and our engine.

Ultimately, the valuation of a business depends on a few key factors:

Age, size, industry and operating region

Existing revenues, expenses and profits

Expected growth in profits

Required investment in capital expenditure and working capital (like debtors and creditors)

Fixed assets owned by the business

Get Started What Problem Do We Solve?

See How it Works

Peek behind the curtain and see how the bizval tool works in this video. Using the example of a pizzeria. The Finance Ghost takes you through each of the questions and shows you what the final report looks like. You may end up feeling hungry and you’ll certainly end up feeling inspired to value your business with bizval.

View Example Report

Valuing a business is an art and a science. There are numerous methodologies available. Industry professionals go to great lengths trying to get to the “right” answer.

Here’s the secret though: there is no “right” answer. There is simply a valuation range that financial experts would consider to be reasonable. The purpose of a valuation is to anchor a negotiation or to measure wealth creation. Ultimately, the true value of something is the price agreed between a willing buyer and a willing seller. But if you aren’t familiar with the concept of valuations, how do you even know where to begin?

As complicated as this sounds, there’s an 80/20 principle in play. An 80% accurate valuation can be achieved with 20% of the potential inputs. Most importantly, it can be achieved at literally a fraction of the cost of hiring a team of experts.

Visit our Insights page for podcasts and articles explaining more about the valuation process and our engine.

Ultimately, the valuation of a business depends on a few key factors:

Age, size, industry and operating region

Existing revenues, expenses and profits

Expected growth in profits

Required investment in capital expenditure and working capital (like debtors and creditors)

Fixed assets owned by the business

Get Started What Problem Do We Solve?

See How it Works

Peek behind the curtain and see how the bizval tool works in this video. Using the example of a pizzeria, The Finance Ghost takes you through each of the questions and shows you what the final report looks like. You may end up feeling hungry and you’ll certainly end up feeling inspired to value your business with bizval.

View Example Report