
When the owner of a business asks: "What is my business worth?", do they mean what is the value of my business, or... what will my business sell for? In most cases, the seller is asking what price will my business most probably sell for on the open market.Value and price are different. There is often a big difference between the value of a business and what it will actually sell for. Business Brokers and Business Transfer Agents are constantly approached to explain the difference between value and price, when preparing a business for sale.In essence, a business valuation determines a value that can be irrefutably defended by a suitably experienced and qualified business valuer, or appraiser. A formal business valuation is usually called for when litigation, an Inland Revenue problem, or some other serious issue requires a specific and qualified value for the business to be established.A price is the figure an experienced and accredited Business Broker formulates - employing several accepted methodologies - which, in their opinion, a willing buyer will most probably pay for the business.Business valuers/appraisers find themselves in a difficult position. They can only value a business based on facts, figures, fundamentals, research and other
.. more»