SCORE Small Business Blog

Business Equity: What is My Business Worth?

Many times the most valuable asset on a business owner’s balance sheet is the equity in their business. Helping my clients walk towards financial freedom, I am sometimes surprised at the answers I get when I ask the question. Here is a brief sampling; my neighbor down the street sold theirs for this amount and mine is better, well, rule of thumb is 2.5 times the net revenue or my accountant told me. The more important thought, will my business sell at the time I want to leave my business and for the price I need to fund my future hopes and dreams? A CPA and/or a certified appraiser will be able to help you maximize your bank account not the account of the IRS. The valuation method you choose should be approved by the IRS. This will likely be one of the largest transactions in your life, make sure you choose the right one. There are 6,330,000 entries on on how to value your business. Yikes, which is the right one? Make sure to choose a qualified expert. Most times there is no fee for an initial consultation. Get references and make sure they are not “practicing” on your business.

Next; my business is worth 500,000.00, now what?

-Anne Groth, Guest Blogger
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