How Much Is My Business Worth?

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A business's worth can be determined by a bank by looking at the ratio between assets and liabilities or by determining the net value of the business. Get a business appraisal with advice from a certified public accountant in this free video on starting a new business.

Part of the Video Series: New Business Tips
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Video Transcript

Today's topic is, how much is my business worth? There are several ways to determine the value of your business. And it's going to depend on why you're establishing that. Who your audience is? If you're establishing value for a bank. They're probably going to be looking at your assets. Your assets to liability ratio. They're going to want to know, how much revenue you're generating. If it's been increasing in the last couple years. They're going to want to know, how much debt you have. And if you're being able to pay that down. They're going to want to know, what your appraisal comes in at. And what other common properties like yours or businesses like yours, are valued at, as well. If your audience is a buyer. They're going to want to know, what your appraisal value is. And similar things to a bank. But they're also going to look a little more closely at your revenues and expenses. And compare it to the rest of the industry. The final way is your net value of your business. Is possibly you could run into an entity like a government. That is going to look at your bid capacity. And they're going to want to know what your financial stability is for meeting their needs.

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