">
TechMoran
  • About Us
  • Deals
  • Jobs
  • Motoring
    • Money
  • Pitch Your Startup
  • Submit Your Post
  • Freelance Gigs
  • Travel
  • Men’s Corner
  • Dating
Saturday, January 16, 2021
  • Startups
  • Reviews
  • Insider
    • Obituaries
  • Business
  • Women
  • Blockchain
  • Columnists
  • Hacks & Facts
    • How To
  • Editions
    • US Edition
    • India Edition
    • MENA Edition
    • Asia Edition
    • Europe Edition
    • International Edition
No Result
View All Result
TechMoran
">
Home Tech

Tips to Help You Determine a Business’s Worth

Milcah Lukhanyu by Milcah Lukhanyu
2 years ago
in Tech
9 min read
0

 

If you’re currently trying to buy an already existing business, the current owner will likely ask you to make them an offer. This is at times the hardest part of making any purchase, as it can be hard to determine something’s worth unless you have studied it before. The goal is to ensure that what you get is worth the amount of money you pay for it.

There are numerous methods you can use to determine the value of a business. The business you wish to buy is worth what you think it is but you can use different aspects to make an estimation. These include the value of the business assets. The assets comprise of equipment and other inventories owned by that specific business. Consider the liabilities if there are any and most importantly, conduct due diligence to help you understand what you are about to get in to.

Conduct due diligence

This is the first thing you should consider doing before purchasing a firm. Do a thorough assessment of its financial position, assets, legal status, accounts receivable and equipment. All these will give you an overview of the business’s total value before estimating how much you should pay for it. You can let experts do the assessing for you, as they have the necessary knowledge and resources concerning the matter, something that you might lack. Do not forget to study the business’s reputation by checking with its vendors, customers, and suppliers to know their good faith as this will determine if they will be willing to continue doing business with you after taking over.

READ  Nigeria's SmileAndTalk Media Unveils New Mobile Game App

Assets evaluation

The seller should at least give you a detailed list of what is included in the sale contract. The assets may entail inventory, buildings, land, equipment, business name, employees, customers, vendors, and suppliers, not to mention its intellectual property. When it comes to the equipment, ensure that you have their dates of purchase, model, maintenance schedule and their operation status to help determine their depreciation value. Consider if any of the stock inventory is obsolete and if there are any perishable items, consider their expiry dates. Check if the receivables are collectible and ensure that there no disputes involved.

Related posts

History of Binance: The Success and Failure of One of the Most Popular Cryptocurrency Exchange

January 15, 2021
0

How to fuliza by Safaricom guide

January 15, 2021
0

ASUS debuts new ZenBook Duo | Pro Duo, VivoBook, ExpertBook and Chromebook laptops at CES 2021

January 15, 2021
0
signal-apps

Is Signal That Different From WhatsApp? Here Are 5 Ways It May Be Different

January 15, 2021
0

What about the liabilities

For starters, who will be liable for the business loans and liabilities after taking over? The nature of assets primarily determines this. In a worst-case scenario, the company’s previous lender could have the power to seize the assets if you are unable to settle the debts on time. In such cases, you could be left with nothing. Ask the seller if s/he has signed any previous agreements that could affect the value of the assets or your freedom of action. If that is the case, you may want to consider just purchasing the assets of the business and not the business itself.

READ  Lagos State Launches e-certificate of Occupancy

What’s the market value?

If you are looking for a business for sale, the chances are that you have already gone through listings on different sites in your area of choice and you already have a clear idea on the market value range. It is therefore easy to determine the minimum and maximum amount to pitch as your offer. This should also be determined by the area that you are looking at. For example, businesses for sale in Los Angeles or other major cities in California will likely require a greater offer than businesses located in the middle of the United States. Once you’ve determined the worth of the location, you can then perform an assets appraisal to identify the specific business’s true value. Make sure to also look at its accounts receivable, especially if it deals with many customer accounts. Let an expert help you in the valuations for better results.

You could take it for a test

Before signing the purchase agreement, you can ask the owner to let you take try to run the business for a small amount of time. This can help you find out more details that you could not acquire by merely asking questions. It will also give you an idea of what to expect, including the sales and profits you could gain from it. If the seller agrees to this, it could be a good sign, and it shows that you are serious about buying the firm. 

Shares agreement

Any individual who buys shares in business gets a stake in it, and this includes all the business assets and liabilities. When you buy the company, it could mean that you will be involved directly in the management, or you could become a silent partner. It is up to you to decide which choice will work for you since each comes with different transition requirements.

READ  Kilimall introduces flash sales in Kenya

After doing these evaluations and coming up with a reasonable price offer, you can tell if you can truly afford the business. If you cannot come into an agreement even after negotiation, it is time to move to the next opportunity and follow the same tips to evaluate its worth.

Readers 2,593

Share

  • Click to share on Telegram (Opens in new window)
  • More
  • Click to share on Tumblr (Opens in new window)
  • Click to print (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)
  • Click to share on Pinterest (Opens in new window)
  • Click to share on Reddit (Opens in new window)
  • Click to share on Pocket (Opens in new window)

Like this:

Like Loading...

Related

Milcah Lukhanyu

Milcah Lukhanyu

Milcah Lukhanyu covers daily news briefs at TechMoran. She is the person who will probably read your press release and get the story out of it or totally trash it. Send tips to [email protected]

Related Posts

cryptocurrencies

History of Binance: The Success and Failure of One of the Most Popular Cryptocurrency Exchange

January 15, 2021
0
How To

How to fuliza by Safaricom guide

January 15, 2021
0
Tech

ASUS debuts new ZenBook Duo | Pro Duo, VivoBook, ExpertBook and Chromebook laptops at CES 2021

January 15, 2021
0
signal-apps
Tech

Is Signal That Different From WhatsApp? Here Are 5 Ways It May Be Different

January 15, 2021
0
Tech

Between WhatsApp, Facebook And Signal Which Platform Collects More Personal Data?

January 15, 2021
0
Tech

HTML5 Tech Takes Over from Flash to Advance E-Sports Industry

January 15, 2021
0
uganda-8
Tech

This Is Why The Ugandan Web Is Currently In Turmoil And Their Internet Has Been Shutdown

January 14, 2021
0
Leadership

SEACOM suffers second major executive exit as CTO resigns

January 14, 2021
0

https://bit.ly/2VOxuoBhttps://bit.ly/2VOxuoBhttps://bit.ly/2VOxuoB
ADVERTISEMENT

Join our Mailing List

Loading

Recent Posts

realme to release more phones in 2021 to grow its smartphone market share

January 16, 2021

What You Need To Know To Manage Your Network Effectively

January 16, 2021

Baidu establishes an Intelligent electric vehicle arm to bring autonomous cars on a road near you

January 15, 2021

Adam Molai’s JUA Kickstarter Fund Doubles to $2M to Kickstart African Entrepreneurship

January 15, 2021

History of Binance: The Success and Failure of One of the Most Popular Cryptocurrency Exchange

January 15, 2021
">
">

Follow Us

">

There are many sites out there focused on blowing off some steam, from funny entertainment to thrilling experiences like playing online, in some cases online gaming could grant you the chance to win extra money. We came across rocketpot.io while browsing for a good btc casino online and it left us a very good impression with their wide variety of games and crypto offering.

Privacy & Cookies: This site uses cookies. By continuing to use this website, you agree to their use.
To find out more, including how to control cookies, see here: Cookie Policy

© 2019 Moran Media Group - All rights reserved TechMoran.

No Result
View All Result
  • Startups
  • Reviews
  • Insider
    • Obituaries
  • Business
  • Women
  • Blockchain
  • Columnists
  • Hacks & Facts
    • How To
  • Editions
    • US Edition
    • India Edition
    • MENA Edition
    • Asia Edition
    • Europe Edition
    • International Edition

© 2019 Moran Media Group - All rights reserved TechMoran.

Login to your account below

Forgotten Password? Sign Up

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
%d bloggers like this: