[Question] How do I determine my business' value

[pietpetoors]

I am considering selling one of my online businesses but I do not know how to determine its value.

The business do online sales and have some fixed clients and rather good representation on the Internet.

Most of the products I import myself and will also give all my suppliers details to the buyer.

I am still trying to figure out how to determine my profit since I use most of my profit to import more stock

With all the information above can somebody help me with some type of formula I must use to determine the asking price.

Second question, where can one promote something like that in a way that the whole online community do not know that I want to sell because sometimes that scares away your clients because they think there is something wrong in your business.

[Slippy]

*content was removed as spammy*

Maybe stop shilling long enough to read the post first?
Sorry I don't have answers for you Piet, but I don't think Gaynor did either.

[pietpetoors]

Thanks anyway, in the mean time I decided that my business have so much potential that I will rather keep it another 3 years and sell it at ten times what it is worth now

[paulnixon]

According to me to prevent your website business value the crucial decisions we will eventually make your website for the sale.give all the info about your website and with its nature and develop it. You can base the value of your website on the multiple of the profits in turns in. For example a lot of website sellers use a straight formula. This means that to solve for your websites selling price, you multiply the site's net profit by 10. The reason behind this computation is that a return of investment's lower level bottom foundation is ten times.

[BusFact]

I am considering selling one of my online businesses but I do not know how to determine its value.

The business do online sales and have some fixed clients and rather good representation on the Internet.

Most of the products I import myself and will also give all my suppliers details to the buyer.

I am still trying to figure out how to determine my profit since I use most of my profit to import more stock

With all the information above can somebody help me with some type of formula I must use to determine the asking price.

Second question, where can one promote something like that in a way that the whole online community do not know that I want to sell because sometimes that scares away your clients because they think there is something wrong in your business.

There is no fixed formula for the price of a business. There are some guidelines such as 3 years of profits, or nett asset value, or .... But ultimately it depends on how much you want for it and how much someone is willing to pay for it and the range of prices for similar businesses can be vast.

There are business brokers that do valuations and sell businesses (like estate agents sell houses). If you are a serious seller, perhaps try and get hold of one of them for advice on exactly how they can help you.

[pietpetoors]

Thanks

[Miro Bagrov]

The value of the business is determined as a relative figure. There are several methods.

If you need a valuation I can do it. I will never even need to see your business. As long as you provide me the necessary accounting information I can do it.

[Missnancyalex]

You should check out this article I hope it will help you in future when you try to sell your business again. http://www.entrepreneur.com/article/66442

[Miro Bagrov]

From: http://www.entrepreneur.com/article/66442
"One quick and dirty technique is..."

Quick and dirty techniques indeed

I can show a small example for those who are bored enough to follow: I recently bought a Loose Cigarette vending machine

The market value is about 4000 - 3500; I bought it for 1300. To do so I took a R1000 loan from a friend who was with me at the time. The machine was moved from a bar to a retail store.
Now the operation as a whole earns R25 Sales a day.
The Variable Cost = 50% of Sales.
Now if we imagine that this Vending machine is a business. It has the same characteristics of Income, Expenses, Debt, Equity, Asset Value.

The EXPECTED income generated is R25 * 365 = 9125 PA.
Expenses = 0.5 * 9125 = 4562 PA.
Initial Investment = 1300
Let's assume that the alternative investment I could have made is invest the 1300 at 8% in a government bond.
The Net Present Value (The present value of future cash flows) is R2924.53 (this is crunched mathematically as [4562/(1.08)] - 1300
This means that 2924.53 is how much I can sell this operation as a going concern (a business).

[Missnancyalex]

Quick and dirty techniques indeed

I can show a small example for those who are bored enough to follow: I recently bought a Loose Cigarette vending machine

The market value is about 4000 - 3500; I bought it for 1300. To do so I took a R1000 loan from a friend who was with me at the time. The machine was moved from a bar to a retail store.
Now the operation as a whole earns R25 Sales a day.
The Variable Cost = 50% of Sales.
Now if we imagine that this Vending machine is a business. It has the same characteristics of Income, Expenses, Debt, Equity, Asset Value.

The EXPECTED income generated is R25 * 365 = 9125 PA.
Expenses = 0.5 * 9125 = 4562 PA.
Initial Investment = 1300
Let's assume that the alternative investment I could have made is invest the 1300 at 8% in a government bond.
The Net Present Value (The present value of future cash flows) is R2924.53 (this is crunched mathematically as [4562/(1.08)] - 1300
This means that 2924.53 is how much I can sell this operation as a going concern (a business).

Good one.... but i can't understand. I think I am Fool!

[Miro Bagrov]

Good one.... but i can't understand. I think I am Fool!

I'm sure you're not. And at least you didn't fall asleep!

This stuff I wrote exams on until I was blue in the face. Not always passing either. Real life application is more fun than the books.