Download file to see previous pages
History forms a very good foundation in evaluating and valuing a business. However, young companies have little or no history; many have only one or two years of data available on operations and financing (Audretsch & Link, 2012). This unavailability of data further compounds the valuation of a start up since data forms the major building block of any business valuation.
The amount of data accumulated from the start-up business dictates the ease with which the business can be valued. This means that the duration that a start-up has taken is very important in assessing its value. If a business has existed for quite long it becomes easy to value it as opposed to shortly existed business.
Nonetheless, there are a number of alternative approaches that can be used in valuing a start-up business depending on the business in question. Selection of the approach is based on the nature of the business and the market. One of such approach is valuing cash flow from existing businesses.
In this approach the cash flow of already established business is evaluated. This will help know the expected return of the business and payback time of the business (Schell & Tyson, 2012). The cash flows of any business is examined using its present, future values and interests.
Various ways of measuring cash flows are employed in order to analyze financial instruments like loans, bonds, and dividends. These ways of measuring cash flows are Internal Rate of Return, Net Present Value, Annuities and Perpetuities. They are called time value of money techniques.
Perpetuities-These are annuities which last forever under assumption. This means that when valuing company the dividend is considered as a perpetuity. These cash flows grow uniformly throughout the time.
Net Present Value- this involves evaluating unequal cash flows, both positive and negative. A time value of money technique can be used in this case to generate the present value of future cash flows. This
...Download file to see next pagesRead More
Cite this document
(“Valuing a start up business Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
Valuing a start up business Essay Example | Topics and Well Written Essays - 500 words. Retrieved from https://studentshare.org/finance-accounting/1634633-valuing-a-start-up-business
(Valuing a Start up Business Essay Example | Topics and Well Written Essays - 500 Words)
Valuing a Start up Business Essay Example | Topics and Well Written Essays - 500 Words. https://studentshare.org/finance-accounting/1634633-valuing-a-start-up-business.
“Valuing a Start up Business Essay Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.org/finance-accounting/1634633-valuing-a-start-up-business.
Start Up Shoe Business- OPERATIONAL PLAN Table of Contents Production 3 Location 4 Legal Environment 4 Personnel 7 Inventory 8 Suppliers 9 Credit Policies 10 Account Receivable and Payable 10 Reference 12 Start Up Shoe Business- OPERATIONAL PLAN Production HIGHLOWS shoe will have three adjustable heights i.e.
The author of the essay stresses that it's of paramount importance to work out a business plan with all the important sections including finances, operations, milestone objectives and marketing. According to the text, having a business plan significantly reduces the risks and provides a proactive scope.
A start-up business venture is generally a brainchild of an entrepreneur who desires to come up with certain innovative product or offering which is completely distinct from the existing offerings or is competitively superior in quality and usage. Entrepreneurship and Innovation The entrepreneur has an important role in producing innovative products as well as services.
Prior to staring the business, it is paramount to conduct adequate research to find out the best market to venture. Entrepreneurs must come up with strategies that afford them a position ahead of the competition. When thinking of starting a business, measures should be taken to minimize the expenditure and maximize profits.
Advertising within the core spheres, aimed at finding actors, dancers, performers, decorators, directors, etc. 2. Recruiting and arranging the working space a. Rent b. Furniture and office equipment 3. Accreditation The success in an agency business is the matter of awareness and reputation, therefore, the prize money will be spent for the attempts to arrange as many business communications as possible.
Landlines in the office are optional with the advent of high-speed internet via cable. Either by land line or wireless there needs to be communications from the office. Other communications services and devices to consider are: cordless phone, speaker phone, multiple-line phones, and fax, answering machine, pager and palm organizers.
Another advantage is that the income earned is non-taxable.
Being self-employed gives a person an opportunity to work for himself, a chance to do what he enjoys to do. The person can also get to choose who he wants to work with such as customers or clients directly.
 EMPLOYMENT GENERATION: There will be employment generation for the teeming unemployed youths and graduates who are currently keeping themselves busy with some restive and harmful activities. With responsible means of livelihood, the restiveness and vices will reduce.
They have established name world wide. Now they are planning to introduce a new product to present a joint venture of their brands of beauty soap and sun block lotion. They have come with this idea through the process conducted by Research and Development Department, procedure of idea generation will be explained later.
The author states that valuation processes are carried out with a lot of caution, considering the company’s assets quality, the nature of its liabilities as well as the intangible assets. It is beneficial to value a company’s assets since it helps the investors in making sound decisions concerning their company.
13 Pages(3000 words)Essay
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Valuing a start up business"
with a personal 20% discount.