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How Much Is Your Home Based Business Worth?

If the electronic energy in your body’s hydrogen atoms could be utilized, scientists have calculated that a person could supply all the electrical needs of a highly industrialized country for almost a week. By this estimate, the average person is worth about 85 billion dollars! Never sell yourself short. You are unique and immensely valuable as a human being. The payments you receive from life are what vary from person to person.

Anyone building a business for themselves is actually building a lifestyle regardless of who signs the paycheck at the end of the week. You hold the office of the President of your own corporation, which makes you responsible for success and failure. The members of your team are the stockholders and it is your job to see that the value of the stock increases in the years ahead.

Even though the operations of a corporation are complex, they can be reduced to four basic functions: Finance, Production, Sales and Research. Without proper financing, there would be no production. Without production you would have nothing to sell. Without sales you would have to stop production. Without research you could not keep up with the changing times. All four of these functions must flow in unison in order to have a successful business. How successful you are in meeting these challenges will determine your present and future growths.

You must be concerned with growth because nothing in this world stands still. A body in motion tends to remain in motion until acted upon by an outside force. A company that is growing has a tendency to keep growing. The same goes for a company that is either standing still or falling backwards. All responsible business owners should be able to look into the future and predict how well they will progress based on their current level of activity. Never before in the history of mankind has an individual had the opportunity to make a brighter future for themselves than now.

Stand back and look at yourself and your future objectively, as an intelligent stranger might. Ask yourself what you are worth right now. What is your value to your business and what is the value of your business in the marketplace? If you were an outside investor, would you want to invest in your company? If not, then change the reason why. Give personal attention to the growth of your business so it doubles in one year instead of eight. Find a timely business model that has achieved what you want and follow it. If you do twice as much, you are bound to receive twice as much. It sounds simple, but 95% of business owners can’t grasp it. Knowledge is power.

Sales is more than selling a product or service, it’s the way in which we sell ourselves to everyone who is interested in what we have to offer. It is the way we get along with our associates, our families, friends and neighbors. One extra call a day leads to 250 extra calls in a year. In 5 years that comes to 1,250 calls that you wouldn’t have otherwise made. A person can triple their effectiveness in less than a month. How have you been handling the four basic business functions? How much time are you really putting into moving forward?

Home based business owners have to be harder on themselves than any strict boss at a regular job could ever be. Yes, the reason we want to work from home is the have the freedom of doing what we want, but we can’t build a business with that attitude. You have to put the time in to set your business up first. Then we have to constantly strive to improve our effectiveness so we never have to worry about going back to being a puppet of the corporate giant. It’s all up to you to make these decisions. It’s the difference between being worth an average amount of money and an above average amount.

Tomorrow is a brand new day. Begin to think of ways in which you can increase your effectiveness.

How Much is Your Business Worth? Value It With a Business Valuation Calculator

Valuation Potential

There are more than 10 ways to value your business. Each method will provide you with a slightly different answer. One of the more common methods that business brokers use is to value your business is based on how much cash the business will generate in the long term. Business brokers then discount this cash to today’s value. This allows Business brokers to gain a clear understanding of the value of the business in today’s value.

With online calculators assumptions need to be made in order to generate a valuation figure. Given the value of your business profit, we then need to understand how much actual cash you have available in the business. Probably the largest player to impact upon this level of cash is the tax man. The tax man unfortunately wants a significant slice of your profits. When your business therefore earns a profit of $100,000 you effectively only end up with a lesser amount in the bank, as cash after you have paid your tax bill.

The other major assumption that needs to be made, is what we call the “weighted cost of capital”. This might be more simply referred to as the risk of lending money to the business. If your business is a low risk proposition and your future income is guaranteed then this figure would be down at around 4%. However for most small businesses there is a high degree of risk that earnings will remain constant over the next 10 years, so we apply a risk factor of 15-20% or even greater for higher risk enterprises.

With online business valuation calculator, the model calculates your sales and profits over the next 10 years and then discounts this by the “weighted cost of capital” rate.

There are many more factors that could be taken into account including capital injections and expenditures, depreciation and even whether the owners of the business are being paid a fair salary.

Online Business Valuation calcutors can provide an indicative valuation of a business by using discounted cash flow and weighted cost of capital.

Buy A Business Worth At Least A Million Dollars And You’ll Never Have To Deal With Crooked Sellers

I am always railing on and on about why people should buy businesses worth at least a million dollars or more. That are big, with lots of cash flow and with a management team already in place who know what they are doing — so you can just sort of step in and let things go “as is” and not have to think about it.

However, besides all the financial reasons, there is another — very powerful — reason to only go after large businesses like this. A reason almost nobody ever talks about and yet, is probably a more important reason than any other.

And that reason is, quite simply, people who own large businesses, that have good numbers, and that can prove their business is what it is, are almost always straight-shooters and not crooks.

It’s true. I have been doing this for over 50 years and I can tell you right now, the chance of you running into a person that has a business making a million a year that doesn’t have a good word or isn’t a good person…is almost zero percent. There may be exceptions to this, but I have never, in all these years, run into one that wasn’t a man of his word and didn’t genuinely want the deal to go down fairly, squarely and exactly as we agreed to.

Does this mean they are all going to be your best friend?

No. In fact, I have run into one that I haven’t gotten along with. But at this level, where there’s a lot of money at stake, they’re basically all nice people. They’re easy to get along with. And keep in mind, one of the main reasons they are so nice and friendly is because they know you have cash. When you pay cash (using investor financing) you do all the talking. You’re the one who is really in control, and they know it.