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What is a Business Appraisal

Business Appraisal

If you’re operating a successful eCommerce company and you’re getting ready to sell it, the first thing you should consider is how to calculate the businesses’ value on the market. This crucial step is made much simpler if you start with a Business Appraisal.

Getting it done the right way is vital to the success of your sale, at an asking price you’re satisfied with.

A lot of entrepreneurs are not certain how to appraise a business, which is why there should be no guesswork here. Business owners should consider the benefit of reaching out to business appraisal services to ensure the most professional appraisal possible.

If you are moving in the direction of selling your business, a business valuation appraisal is truly a crucial first step.

So, what is a Business Appraisal?

If you’re not sure what your business is worth, don’t try guessing it. It’s important to have your company professionally appraised by a business appraisal service to understand where you stand financially. Once you have that information, whether you decide to sell right away or scale the business first, a Business Valuation Appraisal can help you make better business decisions moving forward.

Sometimes known as either a Business Appraisal or a Business Valuation, it’s the process of determining a valid, accurate estimate of your company’s economic value. There are different methods that can be used to complete this process on either your entire company or individual units within it.

An appraisal for business will evaluate numerous factors to determine the right valuation figure. That valuation method can include looking at your company’s:

  • · Financial statements
  • · Intellectual property
  • · Economic conditions
  • · Industry conditions
  • · Outstanding debts and liabilities
  • · Tangible and intangible assets.

When do you need a Business Appraisal?

There are different reasons why someone would get a Business Appraisal. They include when business owners are:

  • · Selling their Business. It becomes much easier to plan the sale of your business once you’ve completed the valuation. It also helps ensure you don’t sell it for less than it’s worth. Understanding your company’s value lets you also understand why prospective buyers are interested in this sale.
  • · Planning Your Retirement/Exit. If you’re considering retirement, a Business Appraisal will become a valuable resource for you. That can include handling your estate and succession planning. In fact, planning your future once you’ve retired gets easier when you have a complete financial picture of how your business stands today.
  • · Buying a Business. Some buyers request a Business Appraisal as a way to ensure you don’t end up paying an exorbitant amount for a company, a figure that goes above market value.
  • · Forming Partnerships. The same is true if you’re looking to buy into a business or have formed a business partnership. This is a smart way to establish an “agreed price” that both parties find acceptable.

Why is it Important to get a Business Appraisal?

The knowledge you get from an accurate Business Appraisal will prove to be highly advantageous in the long term, whether you sell your business or not. It can provide you with significant advantages whenever you begin negotiating deals impacting your company’s financial health, such as securing a business loan or planning a business expansion.

Having a business appraisal can help you make better business decisions in the future. Small business owners operating in the eCommerce and digital space are going to find it particularly useful to know the actual value of your business, something that comes in useful in a variety of business scenarios. That can include:

  • · Buying or selling a business
  • · Business mergers
  • · Securing lender financing
  • · Handling Business investments

The fundamentals of a Business Appraisal are designed to help you. Professional appraisers have several primary approaches to evaluating a business’s value. They include:

  • · Using market data to compare your business to similar companies that have sold in the past;
  • · Reviewing your income, including the current value of your projected future cash flow and your company’s business financial performance
  • · Using the sum of all tangible and intangible assets you own to determine your company’s value. This approach assesses the business’s balance sheet to arrive at its value.

An appraiser may use one or a combination of the three to determine the fair market value of your business. If you’re ready to sell your business, an independent appraisal provides you with an objective analysis of the company’s value, which helps you price the company appropriately for a successful sale. The valuation is also used to determine the collateral value of your company when it comes to lender financing.

Get a Business Appraisal Through Website Closers

If you’re ready to get a professional Business Appraisal, start by reaching out to the professional business brokers at Website Closers. Our brokers have years of experience and have sold every conceivable type of online business. We can provide you with a business valuation that will help ensure a successful sale.

The brokers at Website Closers have represented thousands of clients in the sale of their businesses. Our operational background as owners of tech companies gives us a significant advantage when it comes to evaluating and preparing Digital, Tech and internet Companies for a Merger or Acquisition event.

We also understand that every Tech, Internet, Website, and Digital business is different, and it’s important to review the hundreds of variables that differentiate one from the next, to ensure you have the right valuation for your company before it’s ready to sell.