How much is my business worth in Sydney ?
We believe this is a very important question that every business owner should ask themselves.
Some people want to know because they are seriously considering selling their business in Sydney,
while others, who have worked really hard for years, are just curious to know how much their business is worth.
Maybe you think you have a great small business in Sydney or your business has grown so much in the last few years that it’s time to seriously consider selling and moving on. So, whether you’re ready to sell your business in Sydney now, or are just curious, you deserve to know the true value of your business.
We have put together some suggestions to show you how to do your own small business evaluation and appraisal. If you are serious about getting a business appraisal then we recommend you get a professional business valuation, but here are some tips that will help you do some numbers yourself.
The first rule to remember is that your business is only worth what someone else will pay for it. So no matter what your sentimental value is, you may have a family business, it may be a business you have grown over the last 30 years, you may have lost money, made money and lost money again, and endured years worth of hard work to get your business to where it is today, but that all goes out the window when it comes time to sell.
There are only a small number of things any prospective buyer wants to know about your business and they are as follows:
Your Net Income (after all expenses including your own wage if you work in the business)
Value of your Equipment
And finally your Asking Price:$$$$
Other things they will try to work out are:
How badly you want to sell your business
How the economy is looking for the immediate and long term future in Sydney
How your specific industry is looking in terms of future growth in regards to the location and demographic
The quickest and easiest way to find out how much your business is worth in Sydney is to work out your Net Income:
This is your annual income after you take away all expenses such as:
Rent, cost of goods, electricity, gas, wages(including your own), telephone, insurance and all other business expenses.
Once you work out this number you need to look at what your Net Income has been for the last 3 years.
If your Net Income has been steadily increasing over the last 3 years your asking price can easily be 10 times last year’s Net Income.
On top of that you can add any Equipment or property your business owns.
If your Net Income has been decreasing you would have to show any prospective buyer why this has happened and also explain why you think this will not happen in the future. You can still sell a business that has been declining however you would more than likely only be able to sell for about five times your latest Net Income or less as this is a much bigger risk for the prospective buyer.
This of course varies from business to business.