How are IT businesses valued or appraised?

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Depending on the type of IT business and whether you are in development, support or servicing there could be trademarks and patents as part of your business model. IT businesses are usually appraised based on a multiple of the net profit to the owner with some market predictions. IT businesses can sell well above the net profit to the owner if they have developed a product that is valuable to someone, especially a competitor. It's important to seek professional advice when buying a business so you can conduct proper due diligence. It’s important to note that an appraisal is an estimation of what the business could sell for in the current market, whilst a valuation is conducted by a licensed business valuer.

Tags: it business

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