Steps to Effective Business Valuation in Melbourne

The business environment is so dynamic in Melbourne that it is not surprising to find businesses change or change hands. This makes business valuation a typical process in this fabulous city. Valuing a business is an indispensable step in buying or selling a company and while it is optional when attracting investors or getting a loan, it is still highly recommended as it gives credibility to your business’s declared worth, provided of course that it is balanced and exhaustive. If you are considering this as your next move, here are steps to make it a success.

  1. Decide if you will work with a Melbourne accountant or a small accounting firm in Melbourne or do valuation on your own. Some may think business valuation is easy, until they get to the part where it’s difficult to put an amount to, say, customer base, brand recognition, business reputation and staff performance. You can try doing business valuation by yourself then call a professional when buyers doubt your asking price or you can start with a pro and avoid doing things twice.
  1. Get all paperwork ready. We are talking about tons of paperwork, from financial statements to legal information, business plans and employee and customer details. It would help tremendously if you have been organized all along but if not, this can take time. Again, it’s best to have a Melbourne accountant or a small accounting firm in Melbourne help you sort through this pile or at least enlist help of friends or family members with bookkeeping experience. Also, some buyers may request for independent valuation and will need copies of these, too.
  1. Determine the valuation method you will use. This one’s tricky and perhaps best explained through a trip to a small accounting firm in Melbourne or talking to a Melbourne accountant. There are various valuation methods used in computing business value like using the return of investment, checking current marketplace and industry worth, making profit estimates, and using business assets (both tangible and intangible). Your choice, or choices as you can use more than one, will likely depend on your business size and type.

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