There is no cut-and-dried answer to this question. Valuation is usually a very subjective issue, and it involves many variables difficult to standardize and homogenize. Different specialists will differ when valuing the same object, even if that object is our same business. Nonetheless, we count on the help of some particular features we have to check whenever we want to have an approximate idea of how much our business is worth.
First of all, the area in square meters. This is intrinsically related to how big your business is, in physical, realistic terms. This is known as the continent. By way of explanation, continent refers to every construction and structural element of, in this case, an office, workshop, studio, laboratory, working space, plant, foundry, etc. Therefore, there is a direct relation between the size of the area and the price of the square meter in our particular place to check the monetary value of our business. Besides, the location of the building in a specific neighborhood or district may influence on the price too. This is somewhat easy to calculate, for everything that must be taken into consideration is tangible and material.
Tangible and material are also most of the the goods we own to execute our company’s purpose. Those may be machinery, raw materials, movable assets, etc. Those can be rated simply by their monetary value, considering their age, damage, situation of use…
That is for the physical place in which our business takes place. For the business itself, we have to consider the following factors.
To value a business basing on sales, we must calculate the predictions on the annual sales to anticipate how much our business earns during a year, particularly, the current year. This is based on many factors, such as the exact type of commerce, the risks, the specifics of the company, etc.
Similarly, valuing a business considering its profits will set the price accordingly to the stream of benefits a company is able to generate. Usually, the results of various years are required to calculate this rating, in order to estimate the worth of the business.
Those abstract dimensions may also be valid to measure the price to pay for our business. There will be disadvantages buyers may use to negotiate down, that we also have to be aware of in advance. All things considered, studying our business deeply may lead us to an approximate conception of the value of our company.