{"id":213514,"date":"2019-05-14T17:54:57","date_gmt":"2019-05-14T16:54:57","guid":{"rendered":"https:\/\/www.pearlaccountants.com\/?p=213514"},"modified":"2023-02-20T09:38:31","modified_gmt":"2023-02-20T09:38:31","slug":"how-to-accurately-value-your-small-business","status":"publish","type":"post","link":"https:\/\/www.pearlaccountants.com\/blogs\/how-to-accurately-value-your-small-business\/","title":{"rendered":"How to Accurately Value your Small Business"},"content":{"rendered":"\r\n

Do you know how much your business <\/a>is worth? Now, we\u2019re certain that you\u2019ve either been asked this very question. Or, it\u2019s a question that has been running through your mind. So, we decided that we should shed some light on this somewhat complex process. <\/p>\r\n\r\n\r\n\r\n

You may have\r\ncome across this article because you are looking to sell up. Or, it could be\r\nbecause you\u2019re genuinely curious about how it works. For instance, this\r\nquestion may have sprung to mind after an episode of Dragon\u2019s Den. Sure, the\r\nbudding entrepreneurs seem to know the in\u2019s and out\u2019s of their valuation.\r\nHowever, when quizzed by the Dragon\u2019s, many of these entrepreneurs seem to trip\r\nup over their own calculations. <\/p>\r\n\r\n\r\n\r\n

We don\u2019t know about you, (now we\u2019re assuming you watch Dragon\u2019s Den<\/a>), but we often find ourselves scratching our heads when we hear the participant\u2019s valuation pitch. For instance, some of these entrepreneurs seem to pluck a figure out of thin air, just to impress their potential investors. Now, we understand that pitching is daunting \u2013 but the worst thing you can do when valuing your business is \u2013 guess!<\/p>\r\n\r\n\r\n\r\n

Guessing, or\r\npresuming will never end well \u2013 unless you\u2019re a fantastic salesperson. Even\r\nthen, regardless of your pitching skills, guessing will only shoot you in the\r\nfoot. So, if you would like to learn how to evaluate your SME accurately, keep\r\nreading. This article may leave you feeling pleasantly surprised, once you know\r\nhow to do this complex skill. <\/p>\r\n\r\n\r\n\r\n

\u201cSorry, I\u2019m\r\nout\u201d \u2013 Courtesy of Jenny Campbell (Dragon\u2019s Den) <\/p>\r\n\r\n\r\n\r\n

Those dreaded\r\nthree words\u2026 Now, we\u2019ve used Jenny as an example, as she has no fear when it\r\ncomes to using the somewhat infamous phrase. Actually, if you\u2019ve never seen an\r\nepisode of Dragon\u2019s Den, we\u2019d better provide some context. <\/p>\r\n\r\n\r\n\r\n

Jenny Campbell<\/a> is one of the Dragon\u2019s, (investors), and what she is most well known for is not investing. Now, her lack of investment isn\u2019t always down to the valuation or pitch \u2013 she just seems to enjoy sitting on her cash. <\/p>\r\n\r\n\r\n\r\n

\"Dragons<\/figure><\/div>\r\n\r\n\r\n\r\n

The image above is from a YouTube clip<\/a> from the show last year. Where she finally said \u201cyes,\u201d to a deal \u2013 as you can see from her fellow Dragon, Debra Meaden. This acceptance of a deal comes as a shock. <\/p>\r\n\r\n\r\n\r\n

Anyway, we\r\ndigress. The point is, you don\u2019t want to lose an investment or sale (if you\r\nwant to sell up), because of a murky, inaccurate valuation. Unfortunately, many\r\nbusinesspeople, are yet to understand this process. Although it is complex,\r\nwhen you know how, and have a simple guide (like this one). It becomes far\r\neasier! Moreover, knowing how to value your business, will be invaluable\r\nthroughout your entrepreneurial career. <\/p>\r\n\r\n\r\n\r\n

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