After using the checklist in Table

After using the checklist in Table 14.2, the entrepreneur can begin to examine the various methods used to valuate a business. The establishment of an actual value is more of an art than a science-estimations, assumptions, and projections are all part of the process. The quantified figures are calculated based, in part, on such hidden values and costs as good-will, personal expenses, family members on the payroll, planned losses, and the like. 5 Several traditional valuation methods are presented here, each using a particular approach that covers these hidden values and costs. Employing these methods will provide the entrepreneur with a general understanding of how the financial analysis of a firm works. Remember, also, that many of these methods are used concurrently and that the final value determination will be the actual price agreed on by the buyer and seller.