Perhaps the number one question on the mind of every printing owner: How much is my printing company worth, and what valuation method should I use to prove it?
There are a number of different methods and tools that a company will use to determine a price. They may take into account the price-earnings ratio; replacement costs of assets, property, and management team; or the discounted cash flow, which estimates a company’s current value according to its estimated future cash flows.
However, what these valuations don’t include is your vision, your human capital, your client base, and your core competitive advantage. Any or all of these could actually make your business worth far more than the company’s appraised value. So how do you determine these?
Understanding financials is the key to a proper valuation
The proper valuation for your company all starts with your financials. According to financial expert Lee Rust, “During my past 25 years of work with small companies, if I have found a single significant failing, it is the frequent lack of a financial control system adequate for the management of their operations.”
Understanding your financials is the first step in our Strategy by the Numbers process. To discuss how you can understand your financials, and ultimately, the valuation of your printing company, click on the button to schedule a free, no obligation 30-minute consultation with the LaManna Alliance.