How do I value my business

Discussion in 'General Business Forum' started by Joebal, Nov 5, 2017.

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  1. Joebal

    Joebal UKBF Newcomer

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    I have an art studio that produces custom artwork on canvas, photographs acrylic and aliminium floating panels. We are well known as the premier business in our area and have no competition.
    Due to illness I am seriously thinking of selling the business.
    The problem is, how do I reasonably value my business without getting an experienced valuer involved.
    I know there are a number of ways to do this, but I keep getting conflicting info.
    Does anyone have any advice on the best way or formula.
    I would really appreciate your help
    Kind regards
     
    Last edited by a moderator: Nov 6, 2017
    Posted: Nov 5, 2017 By: Joebal Member since: Nov 5, 2017
    #1
  2. Mr D

    Mr D UKBF Legend

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    If its based on your work then would the value itself be simply your assets?
    Someone buying it would not be you.
     
    Posted: Nov 5, 2017 By: Mr D Member since: Feb 12, 2017
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  3. ADW

    ADW UKBF Big Shot

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    How do you bring work in? Is there an online presence?

    It will be hard to get much more value beyond equipment and a few thousand goodwill.... if you are lucky. Things like this will often come down to luck and if the right buyer is about at the right time. If not then unfortunately it is second hand values on equipment and stock.

    Might be easier to train staff and to take a step backwards. Hard to be more specific really without more detailed info.
     
    Posted: Nov 5, 2017 By: ADW Member since: Oct 25, 2007
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  4. tukhnet

    tukhnet UKBF Newcomer

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    It also depends if you have regular clients and if you can prove it somehow?
     
    Posted: Nov 5, 2017 By: tukhnet Member since: Dec 8, 2016
    #4
  5. Joebal

    Joebal UKBF Newcomer

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    I have books showing profits of 65000 on just over 100,000 increased from the last 2 years. Fixed assets of around 120,000 and stock at around 40,000
    Our business is increasing all the time and we have a huge repeat customer base. Corparate work is also increased significantly
     
    Posted: Nov 6, 2017 By: Joebal Member since: Nov 5, 2017
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  6. Chris Ashdown

    Chris Ashdown UKBF Legend

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    Are your skills needed or can anyone take over

    As ADW states it might be better to train a manager up to grow the business and then you can take as much of a back seat as you like yet still get the benefit of the growth of the company
     
    Posted: Nov 6, 2017 By: Chris Ashdown Member since: Dec 7, 2003
    #6
  7. Mr D

    Mr D UKBF Legend

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    If business relies on you personally then past figures only show what you achieved. Not what someone else will do.
     
    Posted: Nov 6, 2017 By: Mr D Member since: Feb 12, 2017
    #7
  8. The Byre

    The Byre Full Member

    11,734 5,112
    If you want the real value (as opposed to "I wish it would be Christmas every day!") then take your gross profit, subtract all wages, including your own and remembering that even if you took out £30k as a dividend, you have to calculate PAYE costs and payroll taxes, etc. so that £30k was more like £38k, subtract all liabilities and multiply that figure by four. Now add stock and other assets at fire-sale prices. That is of course an extremely Mickey Mouse calculation, but at least it gives you a handle on what might possibly happen in the real world.

    The problem you have, is that your business is very geographically limited and very specific in scope. That in turn, will limit the number of people who might possibly be interested.

    As @Mr D states, if the business depends on you and you alone, then it really is not very saleable. A business is only really a business, if the owner can fall down dead, without effecting day-to-day turnover.
     
    Posted: Nov 6, 2017 By: The Byre Member since: Aug 13, 2013
    #8
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