What is your business worth if it is not profitable?
Valuation is a science. professional business evaluators are very exact in their analysis, however GAAP, General Accepted Accounting procedures, the bible of public accounting practice clearly defines the value of a business if it is not profitable. Here is the definition:
Liquidated value of the assets.
What is liquidated value? Public auction, the equalizer. This can be determined without being forced to auction as there are so many comparatives an appraiser can easily determine liquidated value of most any asset.
No multiplier, as there are no profits, thus no good will. I hear many small business owners try to compute their business value by industry standards as a factor of gross revenue or other determining benchmarks, number of rooms for hotels, pounds of laundry for laundry business, but GAAP dictates and reality speaks, the value of a losing business is the liquidated value of its assets. That’s it.
This is the truth, the only truth. You need not guess, the value is therefor easily determined.