There are a number of reasons that I wanted my business to be valued, and one of the primary reasons was for the determination of the economic feasibility of starting a small business in the area that I have chosen. Starting a small business can be very costly, and there can be a significant financial risk in this venture, so it is was important to have a firm grasp on the value of the business that I wanted to start, so that I would have some knowledge of the financial potential of the business.
In essence, valuation is a very important mathematical process that would give me knowledge as to the estimated economic value of the interest or investment that I have in the business that I decided to start. This gave me pertinent information as to whether or not this business would be a wise investment, as well as the potential profitability of the business in the future. With this knowledge I could accurately calculate the risks involved in starting this business, and weigh them against the probability of profitability with this business.
I wanted my business valued because the process of business valuation includes an analysis of the present economic conditions, that could potentially affect my business. This aspect of business valuations is crucial, because it gives me the knowledge to determine if the economic conditions are feasible for starting a business of this nature, as well as the conditions of the industry in which this business will function as a whole. The financial analysis aspect of valuation can be used to analyze pertinent financial data that can be used to make an accurate comparison of my business with other businesses in the industry.
The comparative data between the business that I propose to start, and other businesses in the industry, can be helpful in forecasting the trends that will likely affect this business over time. An accurate forecasting of the probable trends that would affect this business over time, gives me the information that will assist me in making the determination as to how and when to start the business.
An analysis of the marketing trends of the industry in which my business will participate, gave me an indication as to the potential of the business to generate profits from good marketing techniques. In addition, income and asset calculation could also be conducted from the data presented.