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Business Valuation is the process of determining how much a business is worth.
Business valuation is a process and a set of procedures used to estimate the economic value of an owner’s interest in a business.
A Business Valuator (or anyone valuating your business) will use a variety of business valuation methods to determine a fair price for your business, such as:
1) Asset-based approaches :
Basically these business valuation methods total up all the investments in the business.
2) Earning value approaches
These business valuation methods are predicated on the idea that a business's true value lies in its ability to produce wealth in the future.
3) Market value approaches
Market value approaches to business valuation attempt to establish the value of your business by comparing your business to similar businesses that have recently sold.
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