2. Fair Market Value: start with the Book Value, and then add or subtract the Fair Market Value of all assets and liabilities in the balance sheet.
3. Liquidating Value: start with the Book Value, and then add or subtract the value you would get from it in a “fire sale” scenario, using the same action systems used by foreclosures and bankruptcies.
4. Market Capitalization: the fair market value of the outstanding shares of the company owned by investors.
5. Going Concern Value: this is the value that a third-party investor is willing to pay for the business if it were to exchange hands – also known as “goodwill.”
6. Synergistic Value: this falls into the abstract thought process where 1 + 1 = 3 makes sense; in a nutshell, this is the value to the buyer of the business. This additional value is the potential created by the joining of forces from two teams, and/or combining assets, technology and strategies.
2. Income Generating Assets: real estate is the perfect example of this, but there are many types of assets that generate recurring income with very little operation required for them to function.
3. Infrastructure: tangible assets, systems and/or technology that give the company the platform from which to serve its customers and generate income. Amazon’s website is a great example.
4. Customer List: a list of past satisfied customers who are likely to buy from you again, or a customer list with recurring income or standard contracts that can reasonably guarantee some sort of income or sales in the near future – barring some sort of catastrophe.
5. Creditworthiness: how is the credit with banks, investors and private lenders? Vendor relationships, credit limits and credit terms play into this as well.
6. Brand: recognition and awareness from customers and potential customers for what the company does. I like to think of “brand” as what the customers think of the business and products before they buy them. The perceived quality of a company’s products and services are also part of the brand.
7. Intellectual Property: the knowledge base of the internal procedures, processes and know-how that are particular to the business.
8. Talent: the capabilities of the employees that a new employee would not be able to perform in the short-term. Corporate culture, leadership/bench and employee retention are all important components because they permeate to customer service and the quality of the product/service provided.
9. Location: this is not only physical location – which is most important for retail and customer-facing type businesses – but also refer to the web presence, search rankings and/or website traffic. In addition, distribution channels are very important.
10. Intangible Rights: some companies have special licensing, permits, contracts, geographic protection and trademarks that are unique and have high barriers of entry from competitors. Enforceable non-compete agreements are also valuable here.
11. Social Platform: the communications platform the company enjoys as part of its contact list, social media and other list of connected people who are referred to as “followers.” However, these are not necessarily coming from actual customers, but are part of a network of potential customers who create word of mouth about your business.