If you were to sell your online business today, how much could you sell it for? Let’s find out!

First and foremost, a business is truly only valued at what someone is willing to pay for it. Let’s say my vehicle is worth $50,000. This doesn’t guarantee I WILL get 50k for it. With that being said, it’s really important to know how much value your company is gaining by the year because it will help you gauge your success. Here’s how to calculate the value of your company, easily.

There are two main factors in determining the value of a business:

“Assets” - this is your inventory but can also include other things, which we will discuss in a moment. But for right now, let’s say your asset is only your inventory.  Let's say you have $10,000 worth of inventory.

“Liability” - this is your debt. If you owe the bank on a loan you took out to buy supplies or inventory, this debt is called a “liability”. This includes credit card debt for the BUSINESS (the $20 a month you charge for the tanning salon is not a business liability. The pizza you ordered last night is not a business liability, kapish?)  Let's say you have $1,000 worth of liability. 

The math here is very, very simple:

Assets minus Liability = Worth

So if you have $10,000 in Assets and $1,000 in Liability, your company is valued at $9,000. (See, I told you it was easy!) Now let’s get a little more technical so you can get a more thorough valuation.  

As an online seller, just owning inventory doesn’t truly give a fair assessment because your inventory could be low today because you have been selling out. Or, your inventory could be at a record-high because you hit a slow time. So, as you can, if you only count inventory, this isn’t a true reflection of a business and actually short-changes you.

OTHER ASSETS

If you are selling your business, you are turning over ownership of ALL of the business. The way you can tell what else is an “asset” is if it can be converted to cash. So here’s a few more to consider:

• Do you own a .com site? If you do, your domain name likely has value. You can sell a domain name and easily convert it to cash.
• Do your logos / branding have value?
• Do you have a mailing list or Customer List? These types of lists are absolutely worth money.
• Do you have a blog that gets traffic?
• Do you have advertising / affiliate accounts that are a secondary form of revenue for your business?  For example, if your business has a Google Ads account and by running Google Ads your business generates an additional $10,000 a year; that's a great asset!
• If you have strong social media accounts (Facebook, YouTube, Instagram, etc), these absolutely have value! In fact we have an article to teach you how to determine the worth of your social media pages, just as a quick example, a Facebook BUSINESS page with 3,100 Likes that posts only 1 time per day but gets around 200 clicks on that post each day is worth a little under $2,000 because they have a high “Click-Through Rate” even though their likes are relatively low. Let’s look at one more quick example; a Facebook page with 174 Likes, that posts an average of 2 times per day, but only gets 1 click each day is worth less than 1 PENNY. Again, we will take the time to discuss all of this in more detail later this week.
• Cash (this applies to the actual business, not what is in your personal account)
• Equipment

You may even have more assets that I have not mentioned! Like I said before; if it’s property owned by your business and it can be converted to cash, then it’s an asset! Trademarks, Copyrights, Patents, Company Vehicle, Company Property and more.  Your goal here is to add-up all Assets and subtract the total amount of your Liabilities. 

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