About Professional Planning Associates Expertise Questions relating to business plan preparation, contents, approach and how to prepare plans that provide investors with the information required to make an investment decision
Experience Professional Planning has been operating since 1993. Its principal has over 30 years of business experience. The Company's financial expert has earned a Doctorate in Accounting
Organizations Gold Coast Venture Capital Club, Coral Ridge Kiwanis
Publications Investor's Business Daily, Vfinance.com, the Black Entrepreneurs Association, Webentrepreneurs.com andIslamiQMoney.cpm
Education/Credentials B.A. from Hofstra University
Expert: Professional Planning Associates Date: 9/5/2005 Subject: Business Valuation
Question I am an entrepreneur who has recently finished my business plan and pro-forma. I now need to be able to place a value on my company so that I will know what each share is worth. What is the best way for me to do this? Do I base it off of my projected gross profit, net profit? How far out can I go to value my company, 1yr, 2yrs, 3yrs.?
Anything you can do to help would be greatly appreciated.
Jason
Answer Jason:
Valuation is a complex question and I am not an expert in the field. There are as many as 11 methodologies. A traditional method is the stockholders equity section of the balance sheet. However your value will depend upon the multiples that acquisition firms put on your industry. For example a computer firm may have a valuation of 3X net worth. I would call a business broker or a venture capital firm for multiples in your industry.The same goes for net profit, which is a measure of value. You could go out 3 years for valuations. If companies in your industry were recently sold, that can be a base for valuation.
