Business Valuations Canada: Getting A Business Valuation In Canada
Canadian Business Valuation: Are you thinking about selling your business?
Let’s be honest, most owners and investors make the most money from their businesses when they sell them.
Before you sell a business, it is a good idea to get a business valuation.
When you want to make your business valuation go smoothly, there are a few things you should pay particular attention to.
Audited Accounts
Okay, your business may not be large enough to require an annual audit, but even so, you should consider having an audit done by a professional firm of accountants.
The team at JTT Accounting Service can help you with annual audits as well an audit before you put your business up for sale.
One of the first questions a buyer often asks is if the accounts have been audited. Having an audit carried out proves that everything which is stated in your business accounts is correct.
It gives a buyer peace of mind.
Buying A Franchise
Are you thinking about buying a franchise?
Buying a franchise is a popular way of starting your own business.
In Canada, franchise exhibitions and shows take place every year. Most companies attending like to attract new franchisees by showing tempting profits.
But, are the profits real? When you are thinking about starting franchise, it is best to make sure the accounts provided are realistic.
Unfortunately, many franchise organisations exaggerate profits. They show spectacular trading results as far as new set ups are concerned.
When something sounds too good to be true, it often is.
JTT Accounting Services is very happy to check out the facts. Don’t forget, you also need to consider the credit status of the business.
Is the franchise company credit worthy? Instead of thinking of them as the company offering to help you set up in business, think of them as your supplier. Are they prepared to show you their accounts? If so, why not?
What Are the Key Considerations In a Business Valuation?
In traditional business, the key considerations include working capital, liabilities and assets.
However, a valuation may also include customer base and intellectual property. Perhaps your business owns a copy right or patent. In that case, you business is possibly worth more than meets the eye.
Your business could also own property. If so, it should be taken into consideration and possibly treated as an asset. Why possibly? If it has a large mortgage, it may be a liability instead.
Why Are You Having Your Business Valued?
Many accountants will also consider why you are asking for a business valuation.
Common reasons include retirement, selling your business because of ill-health or wanting to invest in another business.
Those are all good reasons for selling a business. A bad reason would be a poorly performing business. That should be picked up on the valuation stage.
How Do You Value An Internet Business?
The same principles should apply to an Internet business.
When you are trying to sell an Internet based business having the right records matter. It could be tempting to buy a site from an owner that is making astonishing claims.
But, when it all comes down to it, you need to adhere to the same principles. Is the site making money and how is it making money?
If it is only generating income from Adsense, it could all change in an instant. It is best to make sure your site has several sources of income and a customer base. Active email lists and social media accounts are often worth their weight in gold.
Final Thoughts
The way we do business is changing. In many ways, you can say that the way we value businesses is also going through a shift.
Still, many of the same principles apply. When you are thinking about selling your business, it is important to demonstrate that it has a true value.
If you can do that, it probably means you have probably hired a good accountant along the way. Accurate accounting is an important part of any business valuation.
JTT Accounting Services can help you with your business valuation in Canada. When you would like to find out more, all you have to do is to get in touch.
JTT Accounting Services is only a phone call or email away. You can also contact JTT Accounting Services by filling out the contact form on this very website.