Business Valuations – Certified Business Valuator Australia

Month: January 2018

What Makes A Business Worth Investing In?

You have always been interested in investing in a business, however you always hold back because you are scared of making a bad choice and losing your investment. However, there are some ways to evaluate businesses to reduce the risk you are taking when you invest. Of course, risk is never eliminated, but when you properly evaluate what makes a business worth investing in then you will more than likely have your answer whether the company will be a success or failure before you invest your dollars. The following tips will help you make the right investment.

Investment Tip #1 Management
When deciding whether a business is worth investing in or not you need to evaluate the management because a business really is only as successful as its management. Because of this you want to evaluate if the management is knowledgeable, rational, and able to make the right choices to make the company money and prevent it from losing money. Of course, this is an easy question although the answer is a little more difficult.

Investment Tip #2 Business Plan
A business plan that is well laid out and shows positives, negatives, and how the company and management will handle problems within the business is very important. A good business plan shows that management knows where the company is, where it wants to go, and what it needs to do to get there. Be sure you take a look at a company’s business plan before you invest.

Investment Tip #3 Return on Investment
The ROE, or return on investment, is also crucial when you are considering making an investment in a company. Of course, the ratio of equity to debt can be confusing, but if you evaluate the ROE and other economic factors you should be able to tell if the company is bringing money in or losing it.

Investment Tip #4 Room for Growth
Making sure the business has room for growth in its market is also important. A company that has little competition is preferable, but a company with a moderate amount of competition and a plan to be number one is ok as well. Just do your research.

When you are interested in investing in a company you need to take your time and evaluate the company, look over financial statements, talk to management and have all of your questions answered to your satisfaction. After all, it is your money and you aren’t going to give your money to just any company. So, be sure and confident in the company and have that backed up with proof and you will decrease your risk investing in a company.

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Level Of Interest In Business

So you have decided to jump off the corporate ladder and build your own. You are joining the growing community of home business owners in the United States. The home business segment is being chosen by millions of people. Running a home business offers economic freedom and the satisfaction of being in charge of your own life.

Now that you have decided that a home business is best for you, you begin to wonder what the best business is for you. For every idea you think will work, there are probably ten that won’t. It is imperative that you evaluate the feasibility of the idea. In a business you could be selling a product or a service or a combination of the two. To decide what the best mode is for you, ask what you want to do and what you are capable of doing.

Take stock of your interests and capabilities and then decide what you would rather be selling. If you have been in the hospitality industry, you might consider a career in catering rather than computer sales. A good recipe for success is to combine you interests with your competences. By teaming them with hard work, determination and a focus vision you will go a long way.

Once you have decided on the business you want to invest in, you need to evaluate its options. You need to decide if it will fill a need-gap. Will this business satisfy an existing market? You need to compare your idea with existing markets to see if it will fulfill the need better than other options. Along with this line of thinking you should access the size of the market. Many businesses have failed because the market size couldn’t support any more businesses.

Ask yourself if your level of interest in the project will sustain a few years down the line. Try to forecast how your idea can grow into something bigger. If you decide to turn your hobby into a serious business, ask yourself where you can take it at the end of one year. Ask yourself if you can see yourself doing this for a long time. You need to decide if you feel there is a hope of expanding this business. If you are brimming with ideas then you have probably selected your search home based business opportunity.

Other important issues to decide upon now that you know what you want to do are the financial viability of the project, start up and continuing costs, the amount of time needed for this venture, the space needed for your business and the equipment needed for the business. Most search home based business opportunities are able to fulfill all these aspects, but can you? Success depends on careful choosing a business idea, meticulous planning and some reality checks.

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