“What is my company worth?” Valuations are all about realizing profit. The valuation of a business is the process of determining the worth of a business, looking at profit and evaluating all aspects of the business. In this episode, Mike will discuss IT Valuations pursuant to looking for an exit of your business.
How do you determine the valuation of your IT Services Firm? The simple answer is: multiply the revenue. Business valuation can be used to determine the fair value of a business for a variety of reasons, like positioning it for sale.
Driving the Valuation of your IT Services Firm:
Sustainable and growing profitability is what drives valuations for IT Services providers. This is a key factor in creating buyer interest. Especially if your firm has more than 50% recurring revenue. The buyer has to get to a forecasted return rate to successfully be in a position to buy your business.
The truest meaningful metric of a valuation is having a willing buyer and a willing seller coming to an agreement on a purchase price.
1 + 1 = 3
Get somewhere your business can’t get to alone. 1+1 = 3 to a successful merger or acquisition. RRCG does around 400 valuations a year across the IT Services space which gives us a great perspective on knowing how to help value a business.
When calculating the valuation of your business:
Try our Valuation Calculator!