Internet Business Valuation

Written by Patricia Skinner
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The Tricky Art Of Internet Business Valuation

Some types of business are trickier to evaluate than others. Even valuation experts themselves say it's more of an art than a science! Components of a valuation include present value, value of assets, potential future earnings and risks associated with the business together with present trends.

Not Run-Of-The-Mill

Internet business valuation is possibly one of the most difficult of all to put a value to because retailers on the Net don't follow any of the recognized real-time business models that have been familiar for years. But anyone compiling an Internet business valuation must be aware they do exhibit specific qualities from each.

Science Or Art?

So making an Internet business valuation is a fairly new science-or should I say art. As you'd expect though, the people who are best at it are the people who had a really good grounding in business valuation for real-time businesses. Although it's a new communication dimension, they're still good at Internet business valuation. Why would anyone want an Internet business valuation? Because, just like other businesses, they get bought and sold, they expand and sometimes, they even go bankrupt.

Why Internet Businesses Are Different

Electronic commerce gives entrepreneurs an opportunity to succeed with very little capital outlay, with the unique possibility to do business with other companies or individuals all over the world. As we speak, experts are developing models on which to base Internet business valuation. As yet, these models can only offer a relatively short term perspective.

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