Society is built on business. From small local companies to larger corporations, businesses are what help our societies tick. Growth of business means the growth of economy and communities as well. But owning and operating a business, especially a small business, is much easier said than done. While larger corporations may be more complex, they are generally adequately staffed to handle these larger transactions and operations. Small business owners are in a constant battle to keep growing and succeeding in those shadows of big business. Part of ensuring the continued progress is in having quality small business valuation tools.
Finding a good business valuation firm
Small business valuations are necessary and productive for a number of reasons. Finding a firm or software that will provide a good company valuation tool is crucial to determining the value of the business for growth, new marketing or structuring plans, exit strategies, periods of changing ownerships or partnerships, and finding out just how the business stacks up against other similar businesses, among other things. Shareholders will often want an accurate view of how things are going, there may be reasons to explore the valuation for tax purposes or for asset and estate assessments, or perhaps the company is in need of valuation as it is facing bankruptcy. Whatever the case may be, having the right company valuation tools available is crucial in being able to move forward.
The process of applying your company valuation tool
Because there are so many different reasons why a business valuation may be necessary, the very first step in the process of using your company valuation tool, whether it that is a new software or a firm or service that is assisting you in the valuation, is assessing the need, which in itself can be a factor that impacts the final outcome and results of the assessment. Overall business value can be a very subjective term, depending on the situation.
The two main elements of the assessment process are the standard of value, or how you measure business value, and the premise of value, which is the circumstances that you are valuing the business under. And there are three main avenues of determining the standard and premise.
- Comparison: Holding the recent sales of the company up to other similar businesses and their sales
- Measuring actions: Thorough risk assessment and examining the company’s earning power
- Measuring ownership: Looking at the different assets of the company.
In any case, when performing any type of valuation, the most critical information that must be provided in order to obtain the most accurate results is detailed financial history. When preparing for a business valuation, you should have about three to five years’ worth of balance sheets and income statements.
Small business in a big business world
Technology and industry have done wonders for business. There are now more products, goods, and services available to more people, and more affordably, than ever before. However the way in which our societies and businesses have evolved have turned big businesses into massive corporations, and given very little room for small, local businesses to thrive and grow. Today we are starting to see more of an encouraging trend in support of these smaller businesses, but the big businesses still clearly have the very strong advantage.
Big business had its place. But it is time for small businesses to reemerge, and for many reasons. The focus on large corporations and industry has in some cases led to less-than-ideal working conditions and low wages, lower quality products, and has taken a devastatingly negative toll on the planet as a whole. If we do not shift our primary means of production and business, we could see terrible effects in the very near future.
There are so many reasons to support small businesses. They are often run by people we know and trust, leaders in the community who only want whats best for the community as a whole. Supporting small businesses over large corporations could be a step in the right direction.