Whether you are looking to sell your business in the near future, or you simply want to identify opportunities for growth – valuing your business is a key step that you will need to undertake. There are a lot of different factors to take into account when you value your business, more than a simple price-to-earnings calculation could ever cover. Here is our guide to getting an accurate valuation.
Why get a valuation at all?
You should get a business valuation for one simple reason: knowledge is power. If you are looking to sell your pharmacy or digital health business, you need to know how much it is worth. You wouldn’t try to sell anything else without an awareness of the true value, so why would you try to sell your life’s work without knowing? If you are looking to optimize the value for a sale in the distant future, then a valuation can help you to understand your place in the market and your particular strengths and weaknesses, so that you can work towards growth and improvement goals.
Getting a valuation should be the cornerstone of your business exit strategy – it will inform everything from the timing of your sale through to the type of buyers you can approach.
What is a business valuation?
There is a common misconception when it comes to a business valuation: that you can do it in a few minutes with a couple of numbers in a basic calculation. This is simply not true – a true business valuation takes into account a wide range of different factors. You need a professional analysis of your finances (both current and past), a detailed assessment of assets, knowledge of the regulations around business transitions in your sector, and in-depth market expertise to know what comparable businesses have been sold for.
When should you get a valuation?
You should definitely get a full business valuation at the outset of any exit strategy planning before you take your first steps to enter the transaction market. Many businesses also benefit from conducting this activity annually – it gives a detailed evaluation of the different parts of the business, which can then be focused on for growth, optimization, or dissolution.
Use a business valuation expert
You should not only consider using a business valuation services company – you should find one that has expertise specifically in your industry. Pinnacle Pharmacy Group only deals with mergers and acquisitions in the pharmacy and digital health sub-sectors – that focus gives us the depth of knowledge needed to give our clients the service they need. Using our services gives you a reasonable expectation of what you can hope to gain by selling your business, as well as advice on improving the valuation figure.