Knowing the value of your business is important for many different business endeavors such as for example if you planned on selling your business you would want a rough estimate. The process of determining the value of your business is known by CPA’s as business valuation. New Port Richey residents should not be expected to know the value of their business off the top of their head, especially with the fact that the economy and the price of things are always changing. A certified public account however will make it their job to determine the price of your business such as looking at the prices of similar businesses in your area.

Market Value Approaches

As stated above, one of the many ways that A CPA might be able to determine the price of your business is by comparing them to the price of similar businesses in your area. This is a great strategy for someone who has a business in the city or a populated metropolitan area. With business valuation, New Port Richey residents should be aware though that it is very hard to assign a value to a sole proprietorship based on the market value. It should only be used an estimation and not an exact figure.

The Asset-Based Approach

If a business is unable to be valued based on the prices of similar business, another method that a certified public account can use the determine the estimated value of a business is known as the asset-based approach. With this form of business valuation, New Port Richey business owners would have the number of their total investments combined in order to determine the approximate value of a business. This approach is best for smaller sized businesses and would not be practical for a large corporation who is trying to value their business.

*Disclaimer: The views expressed here are those of the authors and do not necessarily represent or reflect the views of Suncoast CPA Group*