How to estimate business cost

How to estimate business cost

In many cases it is required to estimate the real cost of this or that business. The turn not always reflects the real income of the owner as can not consider costs in modern conditions. For this reason the main factor influencing business cost is the income which brings business.

The sponsor of placement P&G Articles on the subject "How to Estimate Business Cost" Kak to charge a minimum wage Kak to calculate the worker Kak to determine site cost

Instruction

1

For quality standard of business, first of all, estimate the enterprise income, that is that sum which is earned monthly by the owner of the enterprise after payments of taxes and a salary to the staff of the enterprise. Except profit of the enterprise the enterprise income can include also the owner's salary which he receives as the CEO of the enterprise, and also a salary of other family members working for firm.

2

Find out, whether the enterprise works for the or on leased squares. If business works at leased squares, the Russian investors consider accepted if the price of business is equal to the enterprise income in 7-18 months. Sometimes the investors for some reasons interested in acquisition of concrete business are ready to pay for the enterprise the sum equal to the income in 24-30 months.

Requirements to profitability for the companies which are on sale together with the real estate which is in property, as a rule, are not so high. The price equal to total profit for term from two to five years is considered normal.

3

Apply at business estimation of cost one more criterion – a quantitative ratio of potential buyers and the companies offered to sale. In recent years the enterprises of a services sector, public catering and business in the sphere of the food are in the greatest demand.

4

Estimate, the enterprise is how hi-tech. Rather expensively the companies, management with which are on sale does not demand specialized preparation. So, many investors regard car washes as the enterprises which development does not demand original and expensive marketing strategy therefore the buyer is ready to pay for such enterprise more than 30 sizes of monthly profits.

5

Count possible risks. For some buyers absence of risk or the "dark" parties in the transaction justifies higher price. Big cost will be had by the enterprise with completely transparent accounting, even if and with not too high income.

6

Estimate assets of the company. In the presence of the hi-tech and expensive equipment, and also real estate to the cost of a cash flow the liquidating cost of such objects increases.

7

At an assessment of business take stable client base and the trained personnel of the company into account. Sometimes also business reputation of firm matters.