Need Your Business Valued?
The question of how to value a business and business valuations are frequently asked by our clients in Glasgow and throughout Scotland, whether they are actively trying to sell or being merely inquisitive. If you are thinking of selling your business in Glasgow it is essential that you realistically price your business to ensure you receive a reasonable volume of interested parties at a price that is acceptable to you.
Another unfortunate reason why you may want to know how to value your business is for divorce purposes. Obtaining an independent and accurate valuation of your business or your spouses business is crucial in divorce settlements. Divorce can be stressful enough, but if even if you own 100% of the shares in your business, the entire value of the business will be added to the divorce pot, to be shared. At Jacob and Jones Business Transfer Agents we always advise clients in the midst of a divorce to organise a completely independent business valuation and not rely on accountants or any other professionals connected to either party. We deal with a network of solicitors throughout Scotland who have experience in dealing with negotiations surrounding asset and business valuations and therefore can offer you a one-stop shop for advice.
When you ask us how to value a business, our business agents will take the time to explain the different methods of valuation and some of the misconceptions people generally have when estimating the value of their business. The truth is, in reality, there are many ways to value a business in Scotland and many factors that can affect a it’s value. If you are looking to sell your business, you need to consider tangible factors such as profitability – historic, current and forecast – the extent of contracted income or recurring revenues, the strength of the balance sheet – net asset value – etc.
Tangible factors, are comparatively easy to quantify because they are valued according to financial ratios or market rates, can include:
- Financials: history of profit, revenue and cash-flow.
- Fixtures and fittings
Call us on 0141 334 8068
Intangible factors are more difficult to evaluate because ascribing a value is more of a subjective judgement.
- They can include:
- The business’s reputation and longevity
- Relationships with suppliers
- Goodwill – ie, your reputation among customers and potential customers
- Quality of products and services
- The value of licences
- Patents of intellectual property
- Quality of your employees
- Level and quality of competition (and potential for new market entrants)
- Volume of repeat business
- Potential threats – eg, regulatory changes on horizon – or opportunities – eg, a government house-building programme might boost a construction business
At Jacob & Jones, our business valuers will have an in-depth meeting with you to assess each aspect of your business, discuss the range of valuation method’s available and decide on the most appropriate method for your businesses. For further peace of mind, our in-house chartered accountants will also be able to guide you through any capital gains implications.
For a comprehensive business valuation call Jacob & Jones on 0141 334 8068.