If you are going to raise money you need to understand valuation and to do that you need to understand an important little ratio- The Price Earnings Ratio!



Comments


Written by IanDSmith
987 days ago

Thanks Heather. I'm seeing entrepreneurs working really hard on their business but unless you have insight into how investors, funders, buyers think its so easy to work on the wrong stuff! Building business value has to be the objective even if you have no intention of ever selling all or part of it.



Written by HeatherStone
987 days ago

Hi Ian,

Thanks so much for sharing your post with the BizSugar community and for giving us a brief overview of the Price Earnings Ratio. For small business owners, I think the value of a company they have built with their own two hands is often a bit subjective. It certainly wouldn't hurt many small business owners and entrepreneurs, even from a very early stage, to have a look at the value of their business from a more objective viewpoint, perhaps looking at it from the standpoint of how others may see it too.



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