Venture Capital Funding for Fintechs Off to a Strong Start

Venture Capital Funding for Fintechs Off to a Strong Start

Venture Capital Funding for Fintechs Off to a Strong Start

Late March and April were busy months for fintech funding. The year started out very strong for fintech companies and has only grown as the months have gone by. In fact, early-stage companies were able to raise millions of dollars over just a months’ time.

Series A funding rounds were held by Novo, a challenger institution in the field of small-business banking, and the no-code platform provider Unqork. In addition, the stimulation software provider Simudyne and the construction-lending platform provider Built Technologies attracted investments from large banks like Regions Financial, Barclays and Goldman Sachs.

Ever-growing in popularity, artificial intelligence ideas also continue to draw bank support. Online lender Upstart raised $50 million in Series D round. The company also said it could both lower loan loss rate and increase the number of customers underwritten.

At the same time, Extend is building a platform to distribute digital cards by partnering with payment networks and card issuers. Likewise, startup MotoRefi has claimed that it can save consumers $100 a month on vehicle refinancing by connecting them to trusted credit unions and community banks.

Payments Industry Continues to be Transformed

Competition in the payments industry continues to intensify. Meanwhile, traditional banking space continues to struggle in its attempt to recover from its weak state. Since the Great Recession, traditional lending has just not been the same and access to small business financing limited.

For new and established businesses in need of financing, this does not mean the end of your business plans. Your chances of being approved for funding are actually higher than they were just a few years ago, thanks to alternative lenders like First American Merchant.

Through a reputable alternative lender, merchants are able to secure the lowest rates for exceptional financing solutions like a fintech business loan. These providers also offer business funding merchant cash advance iso solutions. Working with a provider like FAM that specializes in the high-risk field and that works with both low risk and hard-to-approve merchants ensures business owners have access to quick and easy working capital.

The payment ecosystem continues to experience major developments that will not be slowing down any time soon. As fintech funding continues to ramp up, make sure your business has all the resources it needs to succeed.

Author Bio: As the FAM account executive, Michael Hollis has funded millions by using business funding merchant cash advance iso solutions. His experience and extensive knowledge of the industry has made him financeexpert at First American Merchant.

Bookkeeping Advice for the Budding Entrepreneur

When a budding entrepreneur has a great business idea, he first researches the industry and if there is a demand for his product or service, a business plan is put together, which will be the framework for the venture. While an entrepreneur needs to have a lot of skill sets, you cannot afford to overlook accounting, and with that in mind, here are some useful bookkeeping tips to ensure you start out as you mean to continue. The knowledge of those skills you need to operate a successful business will be provided here at https://www.saliblog.com/skills-entrepreneurs-need-to-operate-successful-business-establishments.html that will help you establish your business successfully.

  • Enlist the Help of an Accountant– This is something you should do at the very outset, and with affordable accounting & bookkeeping services in Salisbury, you can easily find a suitable firm. The first thing the accountant will do is to help you set up a bookkeeping system which you should follow, and this makes his job a lot easier when it comes to filing your tax returns.
  • Make Good Use of Business Software– There are some amazing computer programs that make accounting so much easier. Business software can help you to create spreadsheets, graphs, charts and forecast reports.
  • Attention to Detail– Ask any accountant and they will tell you that attention to detail is critical when recording business transactions. The numbers must add up, and even the odd penny discrepancy must be uncovered, and if you get into the habit of recording every transaction, it will soon become second nature.

Accounting is a critical element in running a business, and with some professional assistance from the outset, your books will always be up to date.

Global Market of Liner Hanger Manufacturers USA

Oil and gas industry comes under the category of the most successful industries in the world. Another one of its innovative product is a  ‘liner hanger’ which is allowing this industry to make giant strides in the global market. Like in so many industries, Liner Hanger Manufacturers USA is leading the way here as well.

A liner holder is a framework/device that is used to drape a liner in a generation well. The demand for liner holders is identified to be directly related to the number of wells penetrated and finished. The expanding interests in investigation, creation, and boring exercises and the number of upstream tasks, over the world, by the oil makers like the United States and OPEC is relied upon to drive the liner holders market. Therefore, Liner Hanger Manufacturers USA has been dominant in recent times.

The function that separates a liner from a standard casing column is that it does not begin at the highest point of the well, but at a certain point, below the ground.

Liners are also used to save money on metal expenses, as the pipe does not run to the top of the well. It also minimizes cementing costs.

The Global Market of Liner Hangers Manufacturers USA

The demand for Liner Hanger has risen by a substantial 6.5% from 2017. The influence of Liner Hanger Manufacturers USA can be highlighted by the fact that North America has the largest share in the market, which is followed by Pacific-Asia and Middle-East countries. Together, these three areas contribute to 50% of the total demand.

Why Is The Demand For Liner Hangers Going To rising?

One of the main reasons for a predicted rise in demand is a shift from vertical drilling to lateral drilling which has led to a rise in drilled footage per well. Consequently, the demand for liner hanger is also expected to rise.

Over the previous decade, the horizontal lengths of the unusual wells bored in the United States have expanded from 2,500 feet to almost 7,000 feet. As China and Argentina have likewise begun to put resources into their traditional fields, following the United States, the interest for liner holders is believed to increment in the next few years.

United States: The Real Market!

According to EIA, United States Crude production will rise by 25% in the next two years. Tight oil production in the USA rose considerably in 2017 and formed 54% of the total crude production of the United States. Effective hydraulic fracturing and horizontal drilling have also contributed to the increased production rates.

The horizontal rig count in the US in 2017 rose by 19.5% in a matter of just one year. This will have a positive impact on demand for liner hangers in future. The tight oil production of West Texas and New Mexico is the main driver of The United States market.

This increased tight oil production along with the growth of renewable resources has provided opportunities to increase economic development in North America. The average active rig count IN North America is 2018 was twice as it was in 2016. This had a massive impact on the demand for liner hangers in the recent past. The demand for liner hangers will be positively affected by the fact that the USA is planning to become an oil exporter by 2022.

Undoubtedly, Liner Hanger Manufacturers USA has grown tremendously and will only get better from here. Below are some listed major Liner Manufacturers USA-

  1. Schlumberger Ltd: It is considered to be the best oilfield service. It employs 1,00,000 people and got headquarters in Paris, Houston, London and the Hague. It operates in 85 countries.
  2. Halliburton: It is one of the largest oil field companies which operates in more than 70 countries and employs about 55,000 countries. It has got its headquarters in Dubai and Houston. Its primary business segment is Energy Service Groups.
  3. Weatherford: It is one of the leading oilfield organizations giving imaginative arrangements, innovation and administrations to the oil and gas industry. The Company works in more than 90 nations and has a system of roughly 800 areas, including production, administration, innovative work, and preparing offices.
  4. Baker Hughes Incorporated: This company is another important market player as it is the only provider of integrated oilfield products, services and digital products. It claims to have resources, technology and the cloud to reduce wastage and risk. It operates in 120 countries.

Conclusion

The energy consumption is supposed to increase by 28% from 2015 to 2040 worldwide. This fact throws light upon how the demand for liner hanger is expected to rise. With a shift from vertical to horizontal drilling added with effective hydraulic fracturing and continuous growth in renewable resources like natural gas, the Liner Hanger Manufacturers USA  have risen rapidly in the global market for liner hangers and is supposed to only go forward and be the leading market player in this industry.

Great Advice on How to Choose the Best Business Entity for Your New Business

Learning how one can start your own business is the first step towards private freedom and economic security. But with a view to make the process as smooth and trouble-free as possible, you want to make certain you’re going about it the right way.

One of the first things you’ll have to think about when deciding how you can start your own business is what sort of business entity is right for you. There are numerous issues to consider: the character of your specific business endeavor, whether you need to protect your personal assets, whether or not you will be looking for a loan, etc. There are a number of choices out there, every one with its unique benefits and disadvantages.

Sole proprietor

Being a sole proprietor is the easiest business entity option available when deciding how you can start your own business. Basically, it implies that you and your business are the same – you ARE your business. You have no associates (thus the term “sole”), and the companies cease to exist when your involvement ends, whether by choice or your death.

The advantages of a sole proprietor business is its simplicity. You usually want solely to begin doing business. In some localities you may have to file your business with the city or county, and, depending on the kind of business and your local legal stipulations, chances are you’ll need a permit. But other than that, you are typically good to go. You don’t even need a separate checking account, since you and your business are the same (although it probably is sensible to open one, so that you can easily differentiate your enterprise and private funds).

After all, a sole proprietorship comes with a few disadvantages, too. Before everything, since you and your business are the same, so are your assets. Due to this fact, should anyone take legal action in opposition to your organization, your private assets will be at risk, in addition to your business assets. Because of this alone, when you have relatively substantial private assets, another business entity probably makes more sense for you when deciding the best way to start your own business.

Corporation

Most likely essentially the most well-known business entity is the corporation; it’s what you in all probability think of first once you resolve to start your own business. Unlike a sole proprietorship, a corporation is separate and distinct from its proprietor(s). Think of it as a different “person,” if you will. It has its own assets and liabilities, can survive the involvement of its owners, has its own name, checking account, etc.

The most important advantage of choosing to start your own business as a corporation is to defend you and your assets from liability. For the reason that the corporation is a separate entity it’s answerable for its own activities and financial duties – AS LONG AS the owners (shareholders) follow the rules of the state wherein they’re incorporated and keep their private and corporate actions, property, etc. separate from one another. If the shareholders do something on behalf of the corporation that is considered unlawful or irresponsible, they can be held personally responsible.

Different advantages include some tax benefits (talk to an accountant to understand more), plus the enhanced business image of being a “corporation.” Customers, buyers, banks, etc. are often more inclined to do business with a corporation than a sole proprietor.

Along with the benefits of establishing yourself as a corporation come some added complications. Again, you will need to abide by the corporate rules and guidelines of your state of incorporation. There could also be further charges or taxes concerned, maintain records of annual shareholder meetings, and in some circumstances, potentially high tax liability. Corporations are also more complicated and costly to set up. Whereas you can do it yourself, it is sensible to enlist the help from a lawyer or accountant.

Detailing all the pros and cons of a corporation is a giant subject, and can differ from state to state, as well as the type of corporation you form (S- or C-Corp). So seek the advice of a neighborhood legal professional to totally understand the benefits and disadvantages.

Limited Liability Company (LLC)

Thought of by some to be the very best of both worlds when deciding the way to start your own business, the LLC is a relatively new business entity. LLCs offer you protection from personal liability in business matters, but are simpler to establish and maintain than a corporation.

Like a corporation, there are specific rules and guidelines one must comply with in an LLC – however again, typically fewer than in a corporation. The other major advantage is tax-related. Profits in an LLC can move through to the owners. In other words, the LLC doesn’t pay tax itself; rather, the owners pay personal income tax on their share of company profits.

When it comes to disadvantages, there are few (when compared to a corporation). Whereas an LLC is actually more sophisticated to arrange and preserve than a sole proprietorship, it’s typically much less so than a corporation, while offering many of the same advantages.

This article ought to only serve as an introduction to which business entity to choose when deciding how to start your own business. This is a vital decision. Whereas it’s possible to change your business type down the road, it is always less complicated (and less expensive) to choose the best option right from the start. What kind of business is the right one for you? Please check out my website for more information before you speak with your lawyer to turn your dream of having your own business into a successful reality!

How to Turn Your Business Idea Into a Career

Many home based business start with nothing else but an idea and somebody’s will to make that idea into a reality. While it’s true that financing can help you start up quicker and make your new business into your only job sooner, a home based business can become a full time career quickly if you use your resources wisely. It’s important however to take a good look at your business idea before abandoning it all to chase after your dream, since some business ideas won’t be profitable and you may need to adapt it and correct any potential issues before starting up.

Viability analysis of a business idea

You should go to great lengths to decide about the potential of a business idea, because your vision may be clouded by the fact that you’d love to make your business idea into your full time job. Do not leave a stone unturned, and quantify things. Do not buy a full warehouse before knowing for sure that there is enough people willing to buy those goods, even if you think it’s a great idea. Risk should be taken based on hard data and numbers, not just a feeling that things will work out well. It’s also worth asking trusted friends or family to give you their opinion on your business plan, specially if you tend to be overly optimistic, but don’t let naysayers stop you. Most business ideas have potential if they are approached correctly. Maybe your product is not unique, but you can make the way you sell and promote it unique and better than your competition.

Recruit help or train yourself

Take a look at your strengths and weaknesses and how they affect your business, and consider enrolling some friends or family to help you with the things you are less good at doing. For example, if you are really bad at paperwork, and you know it, you may be better off getting somebody to help you with that from day 0 instead of having to pay an accountant a lot of money for a rush job the day before your tax deadline expires. If you know what skills you need you may also consider getting training for them, in preparation to starting up. You can get lots of free training online in subjects such as marketing, sales and general business management and etiquette. This is specially important if your core skills are technical. No matter how good your product is, you’ll need to be able to sell it and manage the cash flow as well, even if you are the best engineer in the entire world.

Get registered as soon as possible

In most countries starting a business is easy and doesn’t cost a lot of money, so you should do that as soon as possible. This will free your hands to start trading without having to worry about such things as the bank taking longer to approve your business bank account than you’d have expected. This also prevents somebody else registering your business name before you get around it. The same goes for domain names, registering your favourite domain name often costs less than a night out, and saves you the frustrating situation of somebody else beating you to it. And once you are registered, make a plan to get started and work for it. Set a final date when you will hand in your notice and become officially an entrepreneur, and do your ground work and research before that so when the day comes you are ready to start trading.

Do you really need financing?

While having your business office sharing the guest bedroom on your house and using an old computer may be a bit inconvenient, it may be a better alternative than trying to raise finance or getting a loan from banks who, in times of economic downturn, may not be very friendly to upcoming small businesses. Many small home business ideas can start with minimal to no capital, and once you have a running, functioning business is considerably easier to access finance to allow for growth. Do not be tempted to get a loan just to finance an expensive office in the best area of town and overpriced equipment that you don’t really need, or you may be forfeiting your future as an entrepreneur. Banks and potential suppliers will look at your past credit history as a business owner before dealing with you, and if you seem risky they may give you more expensive terms.

Promote early, promote often

Even if you are generally not a sales person, make a point of telling everybody you know about your business or they won’t know that you are offering the services or products they, or their friends and families, need. The same goes about having a website and implementing some sort of marketing strategy to create buzz for your new product or service, so you can have clients as soon as you start trading.

There are many ways to advertise your small business for free or at minimum cost, so every home based small business should be able to promote themselves using social media, SEO and even PPC advertising. Create a strategic business marketing plan to promote your business, and plan it so you can do a bit every day along with your core business development tasks.

Many easy business ideas can easily become a full time career if you are willing to stick with it even if it takes a bit of time and quite a lot of effort to become profitable. Despite the fact that being a small business owner is a challenging path, it is also a rewarding a potentially very profitable one. Even if you later on decide to join the workforce again and work for others the experience of being a home business owner will enrich you and make you more desirable as an employee. However, keep in mind that entrepreneurship seems to be addictive, and many business owners start several successful businesses over their lifetime.

Home Based Business Marketing – The Truth About Duplication

Recent conversations regarding the theory of replication and home based business marketing strategies sparked this article. I need to start by genuinely asking the argument of whether or not we should be chasing duplication at all. Moreover, what will we be duplicating?

For years in my business the idea of a duplicable home based business marketing strategy was shoved down my throat and infused within my thinking. I didn’t just accept this idea of using one system that anyone pursued, but I taught the notion to everyone I worked with. Then things changed for me that literally transformed how I understand home based business marketing.

Do not misunderstand, I definitely acknowledge that individuals and businesses crave systems. Succeeding is more challenging if you do not have a process to follow. Let’s face it, individuals need specific direction. New home business owners need a 1,2,3 kind of system. You have to ask yourself what your home based business marketing system is in fact yielding or replicating. Additionally, is your system really duplicating at all?

In order to answer this question, we initially have to describe duplication within the conditions of the home based business marketing field. The average home business owner views replication as the primary goal. Expressly, when we have enough individuals duplicating our business system, we may sit back, enjoy, and observe as the checks keep rolling in. This type of belief is actually buying into the myth of duplication. Allow me to demonstrate.

We start with the hope that one by one or two by two we will add others to our sales force who will follow and copy our home based business marketing strategy. We think that the majority of people will get comparable results to our own, before long momentum is achieved and we will be duplicating in masses. In due season though, real life slaps us in the face as the accomplishment of true replication isn’t as easy as we anticipated. This is where the light bulb was turned on for me and altered my rationale concerning duplication.

After 8 years of working my business persistently, I recognized that even though we had assembled a healthy business, we were still stuck in the same situation as when we began. Yes, I was making a lot more money than when I first started my business and had some pretty awesome perks; yet, I hadn’t secured the degree of viral duplication that everyone talks about. Hence I started studying home based business marketing programs.

I found that replication is a myth in the home business world. This might rattle your chain a bit; yet, I wish to rouse your beliefs. Fairly ask and assess what the statistics are in your business regarding overall duplication and real people seeing real results? For a fair assessment you need to examine more than the handful of individuals who may be having direct or singular results. The question is how many individuals are able to realize true reproduction in depth in your business?

Earnestly assess your business and ask:

Has your team grown apart from your personal contact? Fundamentally this indicates that you regularly have team members that you have never met who are generating ample numbers without you.

Would you be able to completely remove yourself and your personal resources (your closing calls, webinars, training, etc.) from the arrangement and have your team persist to multiply?
Is your team creating multiple legacy type businesses to the point where they could not be swayed to move to another company?

Could you walk away from your business and travel the world for an entire year without affecting your income?

Most people are answering these questions with a negative response. If you are answering yes to all of the above, either you are out of touch with reality OR you hold a superior home based business marketing formula that understands that true replication can’t be achieved with one limited home based business marketing system.

The reason so many people struggle to duplicate their home based business marketing lies in this answer. A simple system designed to be mass replicated does not exist. Why? Let’s get back to my light bulb moment.

After eight years of employing a duplicable home based business marketing plan, I was still doing the same things I was doing whenever I began working my career. Until I reprogrammed my beliefs and reprogrammed my strategies, I would continue doing the same things always. We are simply human. Each of us are different and bring to the table a different skill, talent, gift, personality, and perspective. Buying into an idea where a single home based business marketing plan will essentially clone your results is insanity.

I was executing the identical tasks repeatedly because I wasn’t offering options, strategies, and home based business marketing methods that would function for different individuals. I was wrongfully believing that anyone could be altered and adapted to fit the plan, rather than tailoring the system for dissimilarity. An eye opening lesson it was.

Duplication is a myth considering nobody may duplicate you. Nobody will do exactly what you do and get the exact same results. Until you discount the idea of mass duplication and adjust your home based business marketing system, you will make the same mistakes I made and continually reconstruct your team searching for team members just like you!

Business Must Advertise Where New Clients Search

Today, people are “on the move”, searching on their phones while walking, while in conversation – watching TV. They are looking up, where to go for what is something which has become second nature.

Now it is up to a business to advertise where people are searching or they will loose out on new business. Can they exist off just word of mouth, or existing business? Perhaps – at least for a little while. There is however a strong doubt.

Small businesses which are advertising where people are searching will establish relationship with their new clients, who in turn will go to the business on line pages and leave recommendations and comments, which other searchers will see.

Business which is not advertising online will loose out altogether. It is difficult for some business owners to understand the changes in the market and the special urgency to change, and how important these changes are to their business. The new way of marketing, deriving from continually new electronic gadgets, are as powerful and fast as an oncoming freight train.

Here are some of the easy to understand rules for small business: Starting with the business domain name, especially for their online advertising and on their service vehicles.

When people use their names in a dot com address they must first assume that their name is not known. It also may be important to them, but not to a prospective client who searches..not for Michael Brown, but a painter, or a dentist. If small business wants to be found by NEW clients, they have to learn very quickly, that they need to buy a new keyword domain for a few dollars so they are found by Google’s, Bing’s or Yahoo’s search engines.

A prospective client goes online, to find a business, they will search (as in my example) for a dentist (and so they won’t find dentist from all across the country or world, they most likely look for dentists in their home town).

The best domain name for advertising might even be:.Dentist John Smith dot com, as a simple example. What their business is or does should come first, because it is what people use as a search term. Their name is secondary and can be somewhere else on the business page. People who do not know the name certainly won’t be able to enter it in the search, neither will people who know the name already – go online and look for them, they have no need..

In addition, advertisements such as: “I am the number one dentist in hometown USA” also no longer impresses. Searchers finding a business see previous clients who used the business before, often will leave feedback. These feedback can be devastating to any business, if they are negative. For a business, especially a ‘service’ business, such as a Physician, Dentist, Cosmetic Surgeon etc…to ignore the power of a feedback, may it be positive or negative..is extremely important.

Astonishingly enough, I have rarely found serious abuse of feedback by a consumer. As anything, one has to take feedbacks, both the positive and negative lightly, and speak to the business owner, if you have any questions.

When someone moves from one State to another, they immediately go online, looking up resources in their new home via Google and the feedbacks of people who have used a particular business. If they find a negative comment, they continue searching for others, not wasting time. So – you see how incredibly important your online visibility is for your business.

Another difficulty for businesses seems to be the choosing of domain names. Most take the word “name” to mean – their personal name – not a name that someone not knowing them personally – would connect with their business.

It is utmost important to get a domain name which describes the kind of business they have. A domain name which helps searchers find their business.

Let’s say you really are the best dentist in hometown USA, wouldn’t you want to be recommended online – Google places or yelp (and many other sites) for all the world to see?

Of most importance, right this moment, NOW – is to thoroughly understand the unprecedented pace at which technology is moving forward – cloud computing will help make all searches and everything else online even faster – more instant, businesses who are ignoring the changes or are not taking them dead serious, will undoubtedly be left behind in the dust their business competition who heeded the warning, is leaving behind..

Businesses have to make changes and they have to make changes now, if the business is to survive. As a business owner you must understand the principles of online searches, also called SEO. (Search Engine Optimization)

AGAIN – Your name is not of great importance to a new client, but what your business does- is of utmost importance. It is “sink or swim” for the survival of your business.

How to Value a Business – The Free Business Valuation Calculator

Every business owner should have a good idea of what their business is currently worth even if they don’t intend on selling the business soon or at all. But you may also need to know what a business is worth in the following non-exhaustive list of circumstances. How many reasons do you have to find out what a business is worth?

  • Buying a business or division externally or internally
  • Selling a business or division externally or internally
  • Shareholder/partner agreements and buy/sells
  • Estate and superannuation planning
  • Family law – separation and prenuptial
  • Business insurance policy structuring
  • Personal insurance policy structuring
  • Actual death or disability of the owner/(s)
  • Litigation as plaintiff or defendant

The problem is that business valuations are a complex mixture of science and art that are further confused by ‘listing prices’ displayed by business brokers and their often flawed ‘rule of thumb’ methods that make no commercial sense. The steps to value a business are fairly straightforward but need to be followed diligently.

The valuation method

The transfer price of any business (or any asset for that matter) will almost always come down to the agreed price between a knowledgeable and willing but not anxious seller and a knowledgeable and willing but not anxious buyer. The purpose of a valuation therefore is to indicate to the seller and/or the buyer what price would represent a favourable financial outcome to them based on their required rates of return. The purest method of valuation is the discounted cashflow (or net present value) approach however this method requires precise knowledge of all cash inflows and outflows between now and infinity for the business. Whilst this method is great for some financial assets with guaranteed cashflows it is impossible to apply to a business with variable cashflows.

The next best alternative used by most business valuers is a modification of the above method called the capitalisation of future maintainable earnings method. This method requires the valuer to forecast the most likely annual earnings figure (earnings before interest and tax) that will then be used as an annual recurring amount in the calculation. The valuer then applies a capitalisation rate to those earnings based on a required rate of return to give the business a value.

Future maintainable earnings (profits)

The earnings will usually be calculated based on the past performance of the business as well taking into account estimated projections. The net profit from the financial statements is adjusted to take into account various factors that are artificial or non-commercial amounts in the financial statements.

The adjusted earnings before interest and taxes (EBIT) for each historical and projected year are then weighted based on some assumptions to formulate a weighted average EBIT or future maintainable earnings, which is considered to be the likely annually recurring earnings amount going forward based on the methods and assumptions used.

Capitalisation rate

The capitalisation rate is inversely proportional to the required rate of return on the investment in the business. The higher the required rate of return, the lower the capitalisation rate and hence the lower the business value. Conversely, if there was no risk investing in a business the required rate of return may be as low as 5% and the business would be valued at 20 times the future maintainable earnings. This is almost never the case though as there are many inherent risks associated with running businesses. It is more likely that the required rate of return would be between 15% and 100% with corresponding capitalisation rates between 7 and 1 times respectively. The more risk, the higher return an investor would need compared to the investment outlay to make the investment.

As the future maintainable earnings has already been calculated the only way to change the value of the business is to change the required rate of return. The higher the required rate of return, the less that the business is valued for the same level of future maintainable earnings.

In the free business valuation calculator that I created on my website there are only 7 factors that influence the required rate of return. Bear in mind this is an oversimplified example as in practice the factors could total over 100. The responses to these factors have a significant impact on the indicative value of the business and are all related to business risks.

Assumptions relied upon

Valuing a business is a complex science that requires an enormous amount of information gathering, due diligence and industry knowledge to give an accurate opinion of value. Due to the limited scope of any basic business valuation calculator the following assumptions or similar are usually made. These assumptions may or may not be accurate and will depend on the specifics of each business.

  1. The information provided by the business is materially correct;
  2. The past is a good indicator of future performance of the business;
  3. The economic, industry and geographic factors are stable;
  4. Key customers, suppliers and employees are supportive of the transaction;
  5. All related party transactions are at fair value except for those specifically identified in the adjustments;
  6. All inventory, plant, equipment, fittings and fixtures necessary for the operation of the business are included;
  7. All depreciation amounts are book entries only and no significant upgrades of assets are required in the near future; and
  8. All necessary intangibles and regulatory permits are transferable.

How to calculate goodwill

Goodwill is simply the difference between the value of the business and the values of the identifiable net tangible assets (excluding bank loans and other loans). Should the indicative value be greater than the net tangible assets you have that much goodwill but alternatively, should the indicative value be less than the net tangible assets of the business, then the business would have negative goodwill and the assets would hold the only salable value.

Get a complete 7-page valuation report in less than 15 minutes from the Free Business Valuation Calculator. A short instructional video on business valuations is included.