Business Valuation

The success of a company is measured by its value. Many entrepreneurs do not know the true value of their company and deal with it only when forced to do so (e.g. in the case of a takeover or merger) but, even then, they tend to resort to empirical methods of valuation.

In the "small business" category, determining the value of the business is an almost unknown practice. But knowledge is power, so knowing the net worth of a company and the factors that shape it, is an important tool and indication of where the company is and, above all, how it can improve in the long term.

Regardless of a company's activity, its fixed assets, its reputation or its dynamics, there is one factor that plays a particularly important role in determining the final value: risk, or otherwise business risk. The lower the riskiness of the business (all other factors remaining constant), the higher the value estimate. quite logically for an external buyer high risk means a lower purchase price, since in addition to the company he is "buying" a significant amount of... uncertainty regarding his investment.

One of the main empirical ways to determine the degree of riskiness of a company - apart from the external environment - is human resources and specifically, management. If an investor is interested in the long-term value of a company, he should look for a competent management team, not a person-centered company. A company that relies too much on one person cannot have a high value, as any success of the company cannot have the timelessness and therefore the momentum that is necessary.

The first step in valuing a business is to record, process and analyze its basic financial and legal data. Based on the results of the analysis, the appropriate valuation method is chosen in order to determine a reasonable range for the value of the business.

Selling or merging a business is a complex process that requires expertise and discretion. We support our clients in negotiations with a range of specialized services.