The assortment of tasks carried out by an entrepreneur on his own makes him, by force, an “expert” in many subjects for which he has not previously had training and had probably never thought to dedicate his time. Once he accomplishes the billing, hiring, insurance, rent, taxes, and success, there becomes a match with a need to grow to consolidate; the business started and stayed in the market.
When you maintain an independent company, you’re accountable for various obligations. Entrepreneurs are busy from accounting to promoting to building up their items or administration contributions.
But, although the hours of the day of half of the self-employed are extended to 10 or more, as shown by the National Autonomous Study (ENA) and the University of Granada (UGR), the excellent work of a single person is not enough when facing this process of growth. It will be necessary to resort to other external resources of confidence that make it possible.
A good starting point will be to know the value of our business through a company valuation, which will give an approximate figure of what it is worth. That will establish the relevance of what we have before a possible new investor if we think about asking for a loan to expand or if we want to transfer or sell our company.
The large international investment banks (JP Morgan, Morgan Stanley, Goldman Sachs …) oversee the merger and acquisition operations of companies of notable importance. These are long and complex processes, and, for their valuation, they charge ostentatious fees, no doubt beyond the reach of any small business owner. However, other valuations of companies, those offered by brands, can have a number that guides us in any of these situations easily through the Internet, with much lower costs.
How do I Use Company Valuations if I Want to Buy?
It can also state that the benefits generated in our activity place us in the position of growing through the purchase of a company. In this case, we can use the valuation of companies to get an idea about how much it would cost us to acquire those that seem most interesting. In light of the figures, the project can continue, materialize in any of them, and test the market to see its viability.
Professionals with more than 15 years of experience carry out these assessments. For their execution, they consider the current value of the gross profits and analyze the company’s situation, comparing it with the evolution of the sector to which it belongs. It authorizes us to know whether the company in question is getting good results or whether these results are online, are better or worse than the average in their sector.
However, before embarking on an important adventure, we must proceed further and have a broad overview of how it behaves, the estimates used for the evolution of the sector or sectors in which we move, and also from the perspectives of the geographical areas we cover.
A famous phrase states, “I did not send my ships to fight against the elements” (which has endured in the popular heritage versioning the words of Felipe II after the defeat of the Invincible Armada at the hands of the English). We can have an idea of an unbeatable business and start with the best tools, but if the market circumstances are contradictory, it will be better to keep the sails lifted and wait for it to escalate.
Company valuations are beneficial not only when we think of company sales, purchases, mergers, or the incorporation of partners into their shareholders. It also makes sense to request them when creating a new line of business or making equity transfers.
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