There’s not a single person on this earth that hasn’t been affected by the Coronavirus in some form or another.
Business owners in particular are now faced with the difficult decision of whether or not to sell the company they’ve worked their whole lives to create.
Exiting your business is never easy, but it becomes more complicated when the market value of your company changes in unpredictable ways (thanks to events outside your control).
Managing to calculate your business valuation with the effects of the pandemic can be tricky, especially when COVID isn’t over yet. There are still many potential changes that can affect your business and have a lasting impact on its overall selling value.
So how do you calculate your business valuation during a pandemic?
Here’s what to expect.
Businesses that were affected by COVID but are now in recovery mode
Many companies that have been affected by COVID are now in recovery mode--these are the lucky ones.
In these cases, business valuations will fluctuate and there will be no clear starting point. A valuation before COVID is the best way to go, but given that the pandemic is not over yet, it's difficult to predict what the valuation of a company after COVID will be.
For recovering companies, all that can really be done is estimate how much revenue was lost during the worst of it and add it to your books to get an idea of how likely your business will be to turn a profit. Much of your value will be based on your current performance.
Businesses that are not out of the woods yet
The COVID effect on the business world will be felt for years to come. The unfortunate companies that are still not out of the woods are subject to an even greater degree of uncertainty than those in recovery mode.
These businesses will need to weigh possible lost revenues against potential future performance for a conclusive business valuation. In some cases, a turnaround may be necessary before they can count on an accurate valuation.
Again, it's difficult to know what the future will bring in terms of COVID and economic downturns, but valuation experts like National Business Search can give you an educated guess (we'll provide you with a range) about your company's value based on your financials and a series of other factors.
If you’re serious about selling your business, let NBS calculate your business valuation and help you discover when the best time is to exit for the highest price. Apply for your free business valuation today, and we’ll let you know if you’re a good fit to work with us!