Seachange Business Brokers

Seachange Business Brokers

How Much Is A Business Worth

A business enterprise, like any asset, is worth what a buyer is willing to pay.

Buyers ask countless questions, but they are primarily concerned with a fair return on their total investment. A typical return on the total investment in a good small business is 20-30% on the total investment after allowing for a reasonable wage to the owner/operator. Prospective buyers must also make judgments about market position, proprietary know-how, competitive strengths, quality of the assets, growth potential, and risks of the business.

To accurately determine the true worth of a business, the companyâ??s accounting reports, usually prepared for tax purposes, must be restated to reflect the true financial performance of the business. Tax lodgements are aimed at legally minimising the profit of a business and while this is a legitimate aim it often does not provide a buyer with an accurate picture of the benefits emanating from the business.

Seachange Businesses help the business owner determine the true value of the business and, most importantly, can help prospective buyers understand the reasons for such value, which allows a transaction to be structured for the maximum benefit of buyer and seller.
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