HOW MUCH IS MY BUSINESS WORTH?

Find Out How to Value a Business to Sell with SOT Business Brokers Perth

If you are considering selling your company, you have likely started to wonder ‘how much is my company worth?’. And, is the valuation process different when determining how to value a small business to sell? The discounted cash flow valuation is still the most common methodology used when determining how to value a business to sell. This holds true for big business, small business and even tech start-ups.

The discounted cash flow valuation model uses core principles of economics and finance, even where the inputs to the model may heavily rely on assumptions. In reading a Buffet essay it was he who likened Aesop’s principle that a bird in the hand is worth two in the bush to one of the earliest business valuation models recorded. He is of course referring to the fact that future cash flows are often subject to a variety of dependencies that may or may not come to fruition. But to work out what the bird in the hand is worth, we must look at all the inputs to the valuation model.

You will often hear talk of ‘multiples of earnings’ in discussions around how to value a business to sell, which is just a derivation of the discounted cash flow model. Ultimately, a buyer wants to know how long it will take them to recover their investment and what return they expect based on the risk they are taking.

Get in touch today for a 100% FREE appraisal with SOT Business Brokers.

How to Value Your Business - a Buyer's Perspective

When considering the value of a business, it is useful to look at the transaction from the buyer's perspective. A buyer is not simply purchasing the current profits of a business. They are investing capital today in exchange for expected future cash flows, while accepting the risks associated with owning and operating the business.

SOT Business Brokers have created a free guide that uses an illustrative Australian SME with annual revenue of $4,500,000. It shows how maintainable earnings, free cash flow, risk and market multiples can be considered together. It is an educational example, not a valuation of any particular business.

Download the guide here.

So, How Much Can I Sell My Business For?

If you are ready to take the next step and find out how much should you sell your business for, get in touch with the team at SOT Business Brokers. Our highly experienced business brokers will start with a thorough analysis of your most recent P&Ls to determine how to calculate your company's worth. Of course, a credible valuation of your business is just the beginning. To find out more about the steps to selling a business or for a 100% FREE valuation, get in touch today.

What our clients say

Graham H ⭐⭐⭐⭐⭐

Business Seller - "I got a great result..."

"Matthew from SOT is GEM to work with. I got a great result out of the sale and awesome advice through the process not only up to when the contract was signed but all the way till settlement. His professional way of handling both myself the...

"Matthew from SOT is GEM to work with. I got a great result out of the sale and awesome advice through the process not only...

Claire B ⭐⭐⭐⭐⭐

Business Seller - "We really appreciate the work you...

"Thanks Alex for your help with selling our business. We really appreciate the work you put in."

Alessandro S ⭐⭐⭐⭐⭐

Business Buyer - "Helping and supporting us every step...

"I want to give a big thank you to Alex from SOT Corporate for helping me achieve our dream of owning a business. After many cold calls to different brokers in Perth , We finally found Alex. He took the time to understand my goals and gave...

"I want to give a big thank you to Alex from SOT Corporate for helping me achieve our dream of owning a business. After...

Paul C ⭐⭐⭐⭐⭐

Business Seller - "We achieved a rate 4x..."

"We approached a number of brokers whose only concern was how much I was willing to dump my business for. SOT approached us professionally and ran through what we could expect in terms of selling our business. We achieved a rate 4x what other...

"We approached a number of brokers whose only concern was how much I was willing to dump my business for. SOT approached...

Anthony M ⭐⭐⭐⭐⭐

Business Seller - "Consistently a quick responsive...

"Alex @ SOT our business broker has been consistently a quick responsive communicator, able to properly listen and understand all.We are grateful for his positive service throughout and the completion of the sale.Thank you Alex we would recommend...

"Alex @ SOT our business broker has been consistently a quick responsive communicator, able to properly listen and understand...

Tonia G ⭐⭐⭐⭐⭐

Business Seller - "An honest business broker..."

"Caleb and the team at SOT took on the challenge of attempting to sell our business with a very limited timeframe to achieve a sale when other brokers were uninterested in “giving it a go”. Despite the reduced chances of making a...

"Caleb and the team at SOT took on the challenge of attempting to sell our business with a very limited timeframe to achieve...

Barjesh K ⭐⭐⭐⭐⭐

Business Seller - "Very easy and clear to deal wit...

"Very easy and clear to deal with Mark. Best experience for sure, I will surely contact him for any sale or purchase of any business in future."

"Very easy and clear to deal with Mark. Best experience for sure, I will surely contact him for any sale or purchase of any...

Veli K ⭐⭐⭐⭐⭐

Business Seller - "Great from start to finish..."

"Alex was great from start to finish with our sale of business! His communication was consistent, prompt and very helpful even when dealing with time wasters. We will definitely recommend him."

"Alex was great from start to finish with our sale of business! His communication was consistent, prompt and very helpful...

Kristy S ⭐⭐⭐⭐⭐

Café in Subiaco - "Excellent communication and sup...

"I recently bought a café in Subiaco via SOT Business Brokers and I was very happy with the overall service. Excellent communication and support – it’s a big decision to buy and I felt confident and informed the whole way...

"I recently bought a café in Subiaco via SOT Business Brokers and I was very happy with the overall service. Excellent...

JP de Gaye ⭐⭐⭐⭐⭐

JP de Gaye Electrical - "I could not have been happier...

"Hi Alex, I just wanted to take a moment to sincerely thank you for the work you completed on Veronica and my behalf with the selling of our Electrical business. As you were aware, my interests in selling my business was primarily...

"Hi Alex, I just wanted to take a moment to sincerely thank you for the work you completed on Veronica and my...