Jul 06, 2022
In Fashion Forum
So lets talk about the basics of valuation that business owners need to Job Function Email List understand. To me, valuation is a very cool thing. We talk about dashboards. We talk about getting the pulse on our business, and I think one of the Job Function Email List most important things we can do is really understand how our business is sitting. And since valuation really is the ultimate business dashboard - and it incorporates every facet of the business - it really makes sense Job Function Email List that business owners understand that. There are a lot of different values; Rob Sleek and his book Private Capital Markets talks about 20 different levels of value. So, when you talk about value, you Job Function Email List need to get really specific about what you are talking about. There are three levels of value I want to talk about, and Job Function Email List the first is fair market value. Fair market Job Function Email List value is the value an appraiser would put on your business for legal reasons or IRS reasons. The value that most of Job Function Email List us think about as business owners is investment or strategic value. That's the value a buyer would write a Job Function Email List check for or structure a deal for your company on. And there's really a third value called dynamic transaction value, when you have a business that's very desired and you have multiple Job Function Email List companies bidding for your business. But in terms of how businesses think about it, one of the things to remember is value is analyzed. Price is negotiated. To me, that's a critical distinction. In other words, business Job Function Email List owners need to understand you can do all the analysis in the world and come up with something that seems to make sense, but the real acid test is what the business is going to sell for in the market, and those are two very different things.