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Putting a Price Tag on Your Business

The value of a business is not just the sum of some numbers drawn from the financial statement. The value can vary dramatically, depending on the valuation method used and business and economic conditions.

The basics of evaluating the worth of a retail business are not complex. The difficulty is in knowing how to apply them to your own unique situation.

There are three general approaches to determining the worth of the company: use the company’s (1) assets, (2) market value, or (3) earnings. A combination of any or all of these is often used. Let’s look at these approaches one at a time.