TREAT YOUR BUSI­NESS AS AN IN­VEST­MENT FROM THE START

Finweek English Edition - - MONEY -

The value of a busi­ness to you is the value of the cash f lows that you ex­pect it to gen­er­ate for you (through div­i­dends, ex­penses that it cov­ers, or ex­cess owner’s in­come) dis­counted back to to­day by a fac­tor that ac­counts for the risk to the cap­i­tal used to gen­er­ate those re­turns. The trick to get­ting a fair price for your busi­ness when you pre­pare to sell is be­ing able to com­pare how its risk/re­ward com­bina-

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