New businesses too often forget about valuation. Is it challenging? Yes. Is the process worth it? Most definitely. Ask any entrepreneur and they’ll talk your ear off about the highs and lows of launching and growing a business – the constant pivoting, the long days and sleepless nights, the all-around thanklessness. They’ll also likely tell you about the unseen efforts, the little victories interwoven into the sinewy strands of the businesses DNA and you wouldn’t be remiss to wonder where the line between truth and self-mythology blurs.
Therein lies the challenge with business valuation. Success is an evolution and when it comes time to pass the torch of that success, how do you prove what its really worth?
The key lies in tracking your business from the start. The DealRoom compiled a list of tools to help you keep tabs on your finances so when buyers come calling, your business can be valued for what it’s really worth.
As if promising to put your finances on autopilot isn’t enough, cloud-based financial tracking service inDinero’s central feature is its dashboard which visualizes your businesses day-to-day activities – sales, payroll, expenses, etc – and lets you track growth in real time. It has budgeting tools informed by previous transactions and information from company accounts and payment services like PayPal. It also has features like built-in alerts and fiscal targeting tools. Overall, inDinero earns points for visualizing the growth (or lack thereof) of early stage companies.
It’s free up to 50 monthly transactions, $29.95 a month for 500 monthly transactions, and $99.95 a month for unlimited transactions. It also has a mobile app so you can keep tabs on you business while on the go.
Between exporting data to Excel or QuickBooks, inDinero continuously pulls in information from various credit card and bank accounts, along with electronic payment services such as PayPal. It has the ability to generate a comprehensive view of your business’ finances and paint the full picture when it comes time to value your business.
Much like inDinero, Corelytics gleans financial information from accounting programs like QuickBooks and Sage Peachtree, allowing you to monitor metrics like revenue, expense, profits, receivables and owner compensation. In addition to setting goals and tracking your own progress, Corelytics – which also has a mobile app – anonymously aggregates industry data, allowing you to compare your business to your industry as a whole and get access to customizable intelligence on metrics within your sector.
A basic subscription for the dashboard is $99 a month or you can spring for the $300 a month version, which includes professional advisory services.
When it comes time to value your business, knowing how you sit within the industry as a whole can give you some leverage in negotiations. Plus, the professional advisory services will keep you on track through your growth phase.
Named for the Bodhi Tree where Buddha reached nirvana, BodeTree is also a financial tracking dashboard that liaises with QuickBooks and your bank accounts, credit cards, etc. Create cash flow forecasts, learn about each metric and why it matters, review trends, compare to peers in the industry and set a strategic road map. One neat feature is connecting with Yelp to see what customers are saying about your business. The dashboard and mobile app combo offers up a balanced scorecard analysis of your business to identify your strengths and weaknesses.
There’s a free version of the platform, which offers cash tracker forecasting, valuation and financials and access to the funding and solution center but for $49.95 a month you can take advantage of the whole suite of tools including peer comparison and strategic road maps.
Perhaps the most valuable asset for seeing what you’re worth is BodeTree’s built-in business valuation. The real-time valuation syncs with your data and is automatically calculated, allowing you to see how much your business is worth and how it changes over time. It also lets you dive in and see just how that valuation is calculated.
Leaning more towards the accounting side of things, Wave Accounting’s main draw is it’s completely free. Like most accounting software, Wave connects with your back account, keeping track of your transactions and offering up reports on your cash flow, invoicing, and expenses. It also has a contacts database and allows you to scan in receipts to track expenses. Wave Accounting works best for companies with nine employees or less but you can pass along access to your account to an unlimited number of users.
There may be no special features here in terms of valuing your business, but Wave Accounting will help you stay on top of your finances, and when it comes time for valuation, you’ll be able to tap into your records and export them easily.