Value becomes a checkpoint, If you do an evaluation today and another one in a year’s time, you can see if you have improved or not.

It comes down to whether you can exist independently and whether you have quality earnings. But beyond that, the question is whether you are serving a real need that people are prepared to pay for, this is at the core of it.

Effectively, how you go about valuing the business is first determining if it can operate independently from the owners and second what the quality of its earnings is. What we do is unpacking that in a really easy way to say how do we understand the quality of your profits and your cash flow, and how do we understand what those look like into the future.

When you have a product that is sellable to lots of people and also sellable to the same people repeatedly because they have that ongoing need, it gives a quality cash flow. 

Probably the biggest challenge is understanding what we call forecasting risk. None of us have a magic 8 ball that we can use to predict exactly what's going to happen into the future. The value of a business is actually forward looking.

The reality about business and building a business of value is that it's often the uncool stuff, the stuff that happens behind the scenes, that matters most. There's a fine balance between being confident as an entrepreneur and having a sense of humility. That sense of humility is an intangible thing, but maintaining it would be my advice. Part of my learning over the years as an entrepreneur has been the importance of remaining grounded and remaining humble.

Often in the early stage of the business - year one, two and three - you're not making profits, you're not making cash flows. I think what's really important at that stage is whether the business can make money. Sometimes you have to invest to get there first. As you build up and scale, as your business gets bigger, can you sell enough widgets at a profit to cover that initial investment and what you've put into the business?

Case studies like a South African jewelry business or a plumbing business showcase bizval’s mission to help entrepreneurs make real impact.

There're many different methodologies that you can use to value a business. Discounted cash flow is an indication of the potential of a business. Earnings multiple looks at what the business is worth currently while net asset value is useful when you consider closing down a business.

Brand is a complicated thing. It's about cash flows, it's about tenure and duration, and it's about how many customers you reach. You can layer that in many different ways, but for us those are the fundamentals that you need to look at.