What is Your Business Worth?

This morning, the New York Times posted a very interesting article on the "Art of Running Small Businesses." In the article, Paul Downs, the owner of his own company, discuss in detail (ie. releases a few of his company's financial figures) the struggle with being your own boss. He talks about how it can be difficult to run a successful and profitable company, if you don't pay yourself & eventually, when you do run a profit, what do you do with the cash? This story, both interesting for it's qualitative and quantitative value, shines a light on something business owners may not be aware of: you need to know the value of your company. Many people think of valuations and appraisals when they are beginning to think about selling their company or developing an exit strategy, but it's just as important to know the value of your company, simply to strategically plan for the next year. Do you know where your company stands in terms of its value? It's easy for owners to overestimate the value of their business because, well, simply: it's not their job. Their job is to run a profitable company. It's up to a trusted and knowledgeable appraiser for valuations to be completely accurate. If you're thinking about selling in a few years: get a valuation - it's the first step in a long process. If you're not planning on selling: get a valuation - it will help identify the steps you need to take in order to grow your business.