Value (like beauty) is in the eye of the beholder – and this is never more apparent than when one is evaluating an emerging or established business.
When introducing your company to potential investors and partners, a significant portion of the conversation typically revolves around the value of the entity and how much it’s worth in an arm’s length transaction. Without the proper grounding, you stand at a distinct disadvantage when negotiations of this nature arise.
Here’s a quick checklist you can use to compute the value of your company:
- Strength of the team (Total Score: 30%)
- How much time are the founders committing to the business?
- How many employees does the business have?
- How many years of industry experience does the core team have?
- What’s the business and managerial background of the core team?
- Are there serial, successful entrepreneurs on the team?
- What’s the average age of the founders?
- Quality of the idea (Total Score: 20%)
- Have you validated the demand for your product/service?
- Has the feedback received by early adopters and industry experts been positive?
- What’s the level of competition in the market?
- Do you have a competitive advantage over other products/services?
- What’s the geographical scope of the business?
- What is the threat of international competition?
- How loyal are your customers?
- Quality of the product (Total Score: 15%)
- At what stage is the product/service roll-out?
- What type of intellectual property protection is applicable?
- Is there any intellectual property protection in place?
- Strategic relationships (Total Score: 15%)
- Is there an advisory board and how many advisors are on the board?
- How many current shareholders are there?
- Do you have legal counselors?
- How strong is your relationship with key strategic partners?
- Operating stage (Total Score: 20%)
- What stage of development is the company at?
- Is the company currently profitable?
Business valuation is the process or set of procedures, used to ascertain the economic value of a business, a unit or an owner’s interest in a business. It is essentially the worth of your business in monetary terms. Do you have a number for this?
Do you want a helpful expert to value your company for you? You can search for ‘’business valuation’’ consultants on our platform.
