Do you know the value of your business?

As someone who buys companies, I find it frustrating that most business "valuation" systems seem to be based more on.....

The amount of the sellers residual mortgage

The cost of getting into the new business

The cost of the next buy-2-let property portfolio they want to buy

What the business agent told them 18months ago, when it was turning over twice as much and before they sacked all the staff

The cost of a retirement villa in Spain, or.....

The cost of the Italian floor tiles for a retirement villa in Spain!

And less to do with the financial value of the business! I suppose a fair question is why do I need to know the value of my business? Here are some thoughts.....

You get run down by a bus tomorrow, and your surviving partner doesn't really fancy coaching people or doing whatever you do as a day job

You get a health scare next week, and are advised to take it easy - a lot easier!

You get approached by your favourite/ideal/most wonderful partner, who after a wild night of passion they say they want to spend the rest of their life with you - subject to you both departing in 2weeks for an exotic island where you will spend the rest of your life

But the most obvious reason is - you could be working very hard, and destroying value even though the turnover and profit is going upwards!

What is the value of your business, or when did you last have it valued? Seriously, if you don't know how to value it or what its valued at, you could be digging yourself into financial misery!