Factors that influence the value of a company – Truforte Business Group Florida

by Justin Langer Content Manager

You are looking to buy a company in Florida and have entered negotiations with the current owner, it won't be long before the asking price comes up. To make sure you are getting the best deal, it is important to know how this figure is calculated, and which factors influence it. In this post, we discuss a few key points to help you assess whether the asking price is realistic.

Valuing a business

The seller determines his asking price based on many different aspects. These include the value of the stock, assets, premises and customer base. Valuable patents or strategic partnerships can also affect the price of a company. Determining the accurate value of these elements is an important part of the total asking price, and must therefore be well defined and substantiated.

Company goodwill

Goodwill can also be factored in when determining the total asking price for an existing company. Goodwill is determined based on an assumption of future profit expectations and factors that contribute to this, such as brand awareness and skilled personnel. Generally, there are two types of goodwill. Corporate goodwill arises from the reputation or achievements of the company. As a buyer, you will benefit from these after the takeover. The second is personal goodwill. This is attached to the seller and lost after the takeover. Whether a business has personal goodwill, and its value, can only be determined by an experienced business broker.

The importance of a business broker for valuation

To determine the right value of a company in Florida, allow yourself to be guided by an expert business broker. This specialist can uncover hidden elements that can influence the value of a company and will also help you to avoid letting emotions affect the valuation process. In addition, they will support you during the takeover to ensure a smooth transition. To learn more, please get in touch with company valuation experts at Truforte Business Group in Florida.

For more information, please visit Truforte Business Group.