How a Business Valuation Can Help Your Client Make a Smart Investment

Jun 11 2019

Whether you’re facilitating an individual’s first ever business acquisition or working with a seasoned entrepreneur, there is always a common bottom line when it comes to investing in a business—making a smart decision that yields a return on investment.

When your clients look to you for assistance in the buying or selling process of a company, you want to be able to provide them with concrete, accurate information. But, how can you accurately predict the future of the investment in question?

Only a business valuation can give you the information you need on a listing to arm your clients with their best shot at a successful, smart investment. Here’s how a business valuation from PeerComps can help you help your clients.

Identify potential problems

Say a business up for sale is reporting high income numbers. Typically, this would be a telltale sign of a profitable investment. But, what if the business owner fails to mention that these numbers are not typical in the industry or that it has been an unusually busy season? If these factors are only identified after a sale has gone through, your client
could have a serious issue on their hands.

A thorough business valuation gives you and your client a deeper look at the background of a business and its industry, so you can easily identify if the listing is a feasible investment opportunity.

Accurate, unbiased view of business worth

The value of a business can be subjective, meaning a buyer and seller might have significantly different ideas of what a business is really worth. For a business owner selling a company, the hard work and tireless dedication that went into building that business plays a big part in their estimates. On the other hand, a buyer is trained to look at potential risks involved in making such a large investment.

This is why a business broker plays such a crucial role. As a third-party, business brokers are able to help appraise businesses from a neutral perspective, and business valuation services can help you accomplish just that.

Reducing your risk

Ultimately, every investor wants to accomplish one thing—take on as little risk as possible. While there is no 100 percent risk-free investment, you can help your clients mitigate the amount of uncertainty in their ventures by providing the accurate information a business valuation can offer. These valuations provide insights into the inner-workings and financials of potential investments, painting your client a clearer picture of the opportunity at hand.

Ready to provide your clients with the information they need? Start your PeerComps business valuation now and get your results in just minutes!

5 Key Drivers that Make a Small Business More Valuable

Jun 10 2019

Small business valuations are essential not only for companies that are trying to not only determine their overall value, but for maintaining pertinent financial information, as well. Small business valuations are influenced by the need for a determination of value, but the value isn’t necessarily absolute.

Business valuation analysis is a process of measuring the worth of the entire business. There are a few key drivers that allow small businesses to improve their overall value.

Small Business Valuation Software

Utilizing proprietary technology for small business valuations can be great for your company. Using this kind of technology can give your business a competitive advantage in your field, allowing your business to stand out against your competition and improve your company’s value.

Know Your Market

If you are in control of your market, you will have a much easier time growing your company, increasing your revenue, and subsequently improving your value. The best way to get a stronger hold on your specific market is to focus on your clientele. You should have a loyal core group of customers and partners, but it’s just as important to have a diversified group of returning customers to really own your market.

Realistic Growth Strategies

You should have a both long-term and short-term plan for the future of your company. You should create a detailed outline going over your company’s expected growth, the goal you’re hoping to reach, and what your company is actually doing and then adjust accordingly. If you have a strong market share, loyal customers, well-documented finances, and excellent organization, you should stand a much better chance at improving your value.

Your Staff Matters

Although having loyal and dedicated customers is essential, having strong and committed employees is just as important for success. Focusing on your company’s culture and ensuring that every employee knows and understands the goal is key to succeeding and reaching the best possible value. Along with loyal employees, your company’s management team must reiterate these goals to everyone and continue to keep them motivated.

Focus on Efficiency

Simply focusing on the efficiency of your entire organization will help lead to overall success. Everything has to be connected, however, as a company that’s focused on efficiency but ignores its employees is destined to fail.