The company’s success is measured by its value. Many entrepreneurs do not know the true value of their company and deal with it only when forced to do so (such as a merger or acquisition) but even then tend to rely on empirical assessment methods.
In the category of “small businesses” to determine the value of the company is a practice almost unknown. But knowledge is power, so knowledge of the net value of the corporation and the factors that shape it is an important tool and an indication of the progress of the company and especially about how to improve long term.
Regardless of the scope of business of an enterprise, of their assets, to the reputation or the dynamics, there is one factor that plays a particularly important role in determining the final value: the risk or else the business risk. The lower the risk of the company (with all the other factors remaining constant), the higher the valuation. Very reasonable, for a foreign buyer high risk means a lower price, and besides the company he “buys” and a considerable amount of uncertainty regarding his investment.
A key empirical methods to determine the degree of risk of a company – besides the external environment-is the human resources and in particular management. If an investor is interested in the long-term value of a company he should look into this a capable management group and not a person-centered company.
A company who based in one person cannot success high value because the company success has to be established year by year and hence the momentum necessary.
The first step in valuing a business is to record, process and analyze key financial and legal data. Based on the results of the analysis is the choice of an appropriate method of valuation in order to define a reasonable range for the value of the company.