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Springfield, MO

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Opinion: How much is your small business worth?

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As a new entrepreneur, you have probably spent some of your time calculating how much your time was worth. Now that you’ve grown your business here in the Ozarks, you may be wondering how much your business is worth.

There are many reasons for determining the value of your small business. You may be ready to raise capital by issuing stock or selling a portion of the business to a prospective partner. An appraisal also may be needed in order to spin off a portion of your business, settle a dispute or divorce, liquidate some assets or sell the business entirely.

When complications arise
Accurately valuing a small business, however, can be complicated.

Most entrepreneurs are capable of boosting the value of their businesses by 40 percent simply by paying attention to the things that make a business valuable. Too often, business owners brush aside valuations, believing them necessary only if they decide to sell.

As a result, only about one in 20 small businesses have completed a formal valuation, according to the National Association of Certified Valuation Analysts.

You can determine the value of a business in many different ways, from do-it-yourself quick and inexpensive software-based calculations, to full-scale, certified valuations by professionals.

The price range is vast, from less than $100 for the simplest software, to thousands of dollars for a detailed analysis performed by certified pros.

Business brokers, hoping to sell your business, may even perform a valuation for free.

Matchmakers
Try to match the person or method you use for a valuation with the reason you are doing it. If the valuation is for loan purposes, for example, look for someone who’s completed small-business valuations for that purpose.

The National Association of Certified Valuation Analysts offers a free service online to help you find a business valuation expert in your area. Look for the “Need Your Business Valued?” link at www.nacva.com. You’ll also find links to other business valuation data resources and services.
Best of luck in accurately assessing the value of your small business, a critical step in becoming a savvy entrepreneur.

Jerry Myers is a certified business intermediary at First National Business Corp. Business Brokers and a mentor with the Springfield chapter of Score – Counselors to America’s Small Business. He is an instructor of Score’s How to Sell Your Business for Its Maximum Value workshop. Myers can be reached at jmyers@fnbcspringfield.com.[[In-content Ad]]

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