What is my
company worth?

What is your company worth? Three quarters of entrepreneurs have no idea. The value of your company becomes clear through a valuation. In this blog, I guide you through this and explain why and when conducting a valuation is beneficial.

What is my company worth?

October 1, 2023
Waardebepaling Bedrijfsoverdracht Corporate finance

The value of your company is revealed through a valuation. Here, a company is not so much valued by adding up assets or multiplying past profits from the annual accounts by a certain factor.

The purpose of a valuation is always the future. The value is not determined by past figures, but by what can be structurally earned with it in the future. It is the present value of the cash flows the company will generate in the future.

During the execution of a valuation, an analysis is carried out of the future cash flows, various market and company-specific (risk) factors, and the (payback) time.

Key factors

Various factors are considered to determine your company's value. Think about market developments, industry trends, and the quality of employees. Assess how your own company stands in the market and which factors play (a significant) role. 

Jeroen Martens
Jeroen Martens Senior corporate finance advisor
Specialist in mergers and acquisitions
My name is Jeroen Martens and I have been advising and guiding mergers and acquisitions since 2006. What I enjoy most is the contact with you as an entrepreneur: it's about the dream or vision you have as an entrepreneur, its realization, and its success. Mergers and acquisitions are complex processes, in which an experienced advisor and guide can offer a lot of added value. With my knowledge and experience, I can help you turn your dream into a success.
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How do you create more value?

Once you know which factors influence the value of your company, you can manage them and create value. Consider: 

  • diversifying suppliers and customers;
  • improving online discoverability of your company;
  • working on the visibility of your track record and reputation;
  • documenting processes and (customer) agreements;
  • maintaining a balanced workforce and;
  • delegating authority.

When is a valuation needed?

When discussing the valuation of a company, it is often assumed this is solely done to support a bid or asking price, usually in the context of a merger or acquisition. However, conducting a valuation is valuable for several reasons:

  1. Supporting a bid or asking price in the context of a business acquisition.
  2. Determining exchange ratios in the context of a merger.
  3. Business succession within a family business (and applying the transfer of shares through the business succession facility).
  4. Entry and exit of shareholders.
  5. Gaining insight into the factors that determine your company's value, allowing you to better manage value creation. This also makes your company ready for sale.
  6. Calculating the impact on value of implementing or not implementing certain decisions.
  7. To attract financing and to make the lower risk profile (= cheaper financing) visible. 
  8. In the context of your financial planning.
  9. Financial reorganizations.
  10. Distribution of dividends in shares.
  11. Estate division.
  12. Gaining insight into strengths, weaknesses, opportunities, and threats.
  13. Gaining insight into the challenges for the next growth phase of your company.

Do you have questions about a valuation? Feel free to contact us.

Preparing for a business sale: 21 questions

A successful transfer begins with good preparation! But where do you start? This is often perceived as difficult. We are happy to help you get started. In this whitepaper, you will find 21 questions to help you concretely start the orientation and preparation phase.

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