Business Valuation, Tinder Gold, and Franchise Love

How Much Is Your Business Worth?

Every business owner should know their business’s value even if they aren’t trying to sell. Figuring out your business valuation will help with growth plans, tax strategies, securing investments or loans and more.

It is tricky for small businesses to determine their worth because there are a few valuation methods that may over or under value the business.

1.       Value by Assets – This is where you take all the business’s assets (revenue generating properties) and you add them all up. Very straightforward but not reliable in determining profitability.

2.       Asset-Liquidation Value – Similar approach as value by asset only using a different approach. In this method, you’re taking all your assets and determining the market value. Essentially what you would get if you sold everything.

3.       Market Valuation Approach – With this method you’re looking for businesses that are similar to yours in size and scope along with industry to determine your value.

4.       Income-based Valuation – There are two main ways to value based on income. The first would be to take previous sales figures and forecast future sales based on potential and trends. The second would be to consider more information such as earnings, business assets, risk, and more to come up with a multiplier. The second method of valuation can help businesses with successful businesses with both assets and potential command several times net worth.

Tinder Strikes Gold

The popular dating app has found a way to make money through paid subscriptions called Tinder Gold. Debuting in August, Tinder Gold increased sales by 19% year over year and has helped the parent company, Match Group, spike 11% on Wednesday. The stock is also up by 75% this year.

Veterans Love Franchises

A disproportionate number of veterans are flocking towards the franchising industry because of its parallels to service. There is an established structure and clear strategy from HQ with all the details laid out. This is not to say they are merely following orders as the franchise model allows flexibility for each franchisee to do it their own way. Per a study by PWC, veterans own roughly 66,000 of franchises.

In addition, The SBA offers veterans support for entrepreneurship in the form of training, loans, and federal contracting opportunities. One program called the veteran advantage has the SBA guarantee loans that are approved if the business is 51% owned by a veteran or military spouse.