Discounted Cash Flow? But what multiple or discount rate should we use? Inc.com wrote about a new website aimed at removing some of the mystery from this age-old question. The topic of the article is a company called You Noodle, Inc, and their website. They offer a Start-Up Predictor that guesses the value of your start-up three years into the future. I took the test and got a valuation much higher than I expected. I think they still have a few kinks to work out of their system, but this is a concept worth watching.

I have been through many professional valuations where experts come in and use a variety of formulas and other subjective and objective factors to determine the value of the company. The reality is that the business is worth what someone else is willing to pay for it. Entrepreneurs and business owners should never waste their time trying to figure out the details of business valuation. They need to focus on adding value to their businesses in the form of creating systems, processes, and procedures that create satisfied customers and reduce the labor and material inputs into the business to their lowest and most efficient forms. If you are having difficulty understanding the value of your company, please feel free to contact on of our CFO Advisors.