The basic principle underlying all business valuation calculations is relatively simple: the value of a business is equal to its expected future cash flows, discounted to reflect the time value of money. In other words, the value of your business is based on how much money it's expected to generate in the future, taking into account the cost of waiting for that money to arrive.
There are a number of different factors that can impact the value of your business, including its financial performance, industry trends, location, and the overall economic environment. And, there are a number of approaches to calculate the final value. It's important to consider all of the internal and external factors affecting a company when calculating the business's market value, as they can have a significant impact on the final number. All businesses are different and identifying the right valuation approach for your business is a combination of science and art.
At Palo Verde Capital, we have a wealth of experience and expertise when it comes to business valuation. As a private equity firm specializing in acquiring majority interest in established main street and lower middle market businesses in the DFW metroplex, we're here to help you get a fair and accurate estimate of your business's value. Whether you're considering a sale or just want to know what your business is worth, we'd love to hear from you.