Best Business Valuation Calculator
Why your business valuation is an important metric to measure even if you don’t plan on selling it. What is included in your net worth and when you need to know it. Tools for calculating your business valuation.
Do you know what the valuation of your business is?
Even if you’re not planning to sell it, that’s an important number for you to know.
Why?
Well, whenever a major life event happens, such as: getting married, divorce, buying a house- all those things suddenly put you in a position where you need to know your net worth.
And guess what? The valuation of your business IS part of your net worth.
People ask me all the time how do I get to curate what a millionaire really is? how do I determine who to invite as a guest on my show.
And my answer always is, of course, “net worth.”
But is it cash in the bank? Do they need to literally have one million in the bank?
Not really. The valuation of their businesses – how much money would they get if they had to sell it right now – makes a big chunk of their net worth. Almost always.
And listen, even if you DON’T plan to sell your business? it is always wise to understand how to calculate its valuation.
That number is not just based on your gross revenue or your net profits. It really depends on your industry, where you are, what your market is- all that fun stuff. It can turn out really really complicated, hence the reason we have calculators to do all this stuff for us. (You’ll find one linked at the end of this post.)
Besides that, you should ALWAYS build your business as if you’re planning to sell it. Even if you don’t.
That’s the only way to actually remove yourself from being responsible running the show all the time. A great book on the topic is Built To Sell and I recommend you read it.
Your business valuation can be a great metric for you to measure your progress, too.
Calculate the valuation where you’re at right now… then, going forward, you can look back and say, “I was there two years ago. Look how much I’ve grown since then!”
And if you ARE planning on selling your business, this will help you get a qualified valuation so that you know what to price it at. (And see if it will actually sell!)
Best Business Valuation Calculator: https://www.bizequity.com/
Either way, it’s good to know your numbers because… as they say: What you don’t measure you can’t improve.
Why your business valuation is an important metric to measure even if you don't plan on selling it. What is included in your net worth and when you need to know it. Tools for calculating your business valuation.
Categories: All, Finance, Other
Hi I’m Jaime. Each and every week I bring you the top business advice from the people who know best.
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4 responses
Nice post Jaime, first time on the Eventualmillionaire blog but really like the content. When you talk about being a millionaire based on net worth I’m assuming this is just assets – liabilities and if this is above ?1m then congrats?
Also thanks for the tool was looking for something to estimate a couple of business values. Most of the tools out there are rubbish.
Thank you Jaime, for compiling these tools. It is really appropriate for my type of business now.
Nice post, much obliged to you, for accumulating these apparatuses. It is truly suitable for my kind of business now.
It was great reading this article from beginning to the end. Thank you very much.