Finance & Accounting Blog


Posts about Finance & Accounting topics to help you succeed
Finance and Accounting Help

Buying A Business

Dec 14, 2009
Q: I want to purchase a small business. How do I know how much it’s worth?

A: Valuing a small business can be quite a challenge. Having an appraisal done will give you the most accurate estimate of the value. But, most small-business buyers find this process far too expensive.

Without an impartial appraisal, you’ll need to investigate and evaluate the business.

Obtain tax returns, balance sheets and other financial documents. Also get copies of any ongoing loans, contracts or leases. Ask your tax or financial advisor to review these documents with you.

If the business owns significant assets such as equipment or buildings, determine the condition of those assets and how soon they will need to be replaced. This will give you a feel for the hard assets that are to be purchased.
Next evaluate the cash flow of the business. Look at sales, revenues, expenses and profits. Again, enlist the help of your financial advisor.

Finally, look at the intangible assets. This is known as “goodwill.” Does the company have a stellar reputation in the community? Does it have a solid base of loyal customers?

All of these evaluations should give you an idea of the value of the assets that are being purchased and the value of the goodwill.

As you can see, there is no simple way to value a business. It’s as much art as science.
NASE Social Media

res-footer-facebook res-footer-twitter res-footer-linkedin

res-footer-blog res-footer-huffpost res-footer-youtube

Related News...

Investing in Your Small Business
Running a successful small business isn’t just about the day-to-day actions of keeping your operations afloat. You need to have a firm focus on the future. As such, making the right investments into your small business is an essential element in ensuring your future is well guided and supported.
Posted on Oct 08, 2021
When to Splurge and When to Save: a Guide to Helping Self-Employed Individuals Budget for Their Organization
Congratulations on starting your own small business. You’re finally self-employed. Being your own boss comes with a lot of perks. You can take long lunches and create your own schedule, but it’s also a big step with a definite learning curve. Much of that learning relates to money. You’re not getting a regular paycheck anymore. How are you going to pay the bills every month and still save for retirement?
Posted on Oct 21, 2020
Business Funding Options in the Age of COVID-19
Although financing in the post COVID world will be more challenging for many small businesses, there are financing options available, you just need to look in the right places. As we’ve witnessed in past recessionary times, the sad truth is that there will be fewer options available as many lenders tighten up their creditworthiness criteria and others step away from lending to small businesses entirely—at least for the short term.
Posted on Oct 10, 2020
Want to see more news items? Click here  

Related Videos...

Tax Reform and how the NASE is demanding simplification and fairness for small business owners.
Tax Reform and how the NASE is focused on simplification and fairness. Contact your congressman and voice your opinion today.
Posted on Mar 21, 2018 by Keith R. Hall
Open a Separate Bank Account for Your Business
Watch Keith explain why opening a separate bank account is extremely important.
Posted on Jan 10, 2018
Want to see more related videos?  Click here  

Still Have Questions?

Ask The Expert

Courtesy of NASE.org
https://www.nase.org/business-help/get-help/finance-accounting/finance-accounting-blog/finance-accounting/2009/12/14/Buying_A_Business