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RESPOND TO DISCUSSION RESPONSES ACCORDINGLY (160 WORDS EACH) LD1. Private Company Valuation. Retrieved from ZC1. Some main financial considerations in valuing an existing small business is looking at the value of their assets such as their inventory and equipment. These are things you would not have to purchase since you are not starting from scratch. This can probably be found on the company’s balance sheet under tangible assets. Revenue is another approximation to use as some businesses are valued at a multiple of their revenue. The capitalized earning approach is also one of the ways to determine the value by looking at the return on the investment that is expected by an investor. Income stream should be looked at as well considering how much it may be worth to you. LE1. Some of the financial considerations in valuing an existing small business are banks, lease financing, trade credit, or venture capital companies. Whether you determine that debt or equity financing is the best choice for your company, there are a number of alternative types of financing available. Depending upon the nature of your business, the financing may be a combination of debt and equity and may be tailored to fit the specific needs of your company. IM1. SG1. TC1.   Some of the main financial considerations to make when considering the value of a pre existing business over a conceptual venture is that it may be less expensive to get the preexisting business running smoothly than it would be be to start from scratch. One perk is that the business is already running, meaning all over

head costs and employee payouts have been established. This allows for a primary focus on expanding or better the business and asking employees about company morale in order to determine a better picture of where the value within the company already lies. Some company’s put all their value on the product, others their employees, and the most successful business focus majority of their efforts on existing consumers. In considering the value of all these parts it allows entrepreneurs to deem what things are worth pouring more money into, or conversly deciding which things too much money has already went into, and how those finances can be tweaked or cut back for the sake of company’s future financial growth. DIS #2 ZC2. A market analysis involves researching the market you’ll service and the need you will fulfill. Some of the components of a market analysis will include finding the annual sales of your market, for example how many cars were sold in your area last year, as well as the current size of your market. It also involves how much market share you believe you’ll gain and what your pricing structure is and gross margin levels. The market analysis is an important part of your financial prospectus because if you are going to look for outside capital your market analysis will help to convince your investors that you know your audience and that there is a real need for your product or service in that market. You must show investors how they will make their money back with growth prospectives as well as a time frame in which your expectations will be met. CG2.