Business/ Start-up

Is there any way to quantify value that any business delivers?

total addressable market

 

Business Startup Plan Marketing Ideas total addressable marketĀ startup, start ups, business value, valuation of startups, startup valuation

 

 

Is there any way to quantify value that any business delivers?

Beauty lies in the eyes of the beholder.
  1. Every business is different and so is the investor.
  2. When you prepare your business plan. You show the investor the value your business can impart from your eyes.
  3. When an investor sees the plan, he sees the value that you show and probably add his own experience in it.
  4. So its difficult to find a generic way to quantify value that a business delivers.

Lets take an example of a pair of eye glasses. It is diamond studded, anti glare coated and all the extra stuff that you can add.

  • A farmer who earns about Rs.5000 a month will not pay more than Rs.200 for it.
  • A merchant who earns Rs.50000 a month will not pay more than Rs.1000 for it.
  • A businessman who earns Rs. 1,00,000 a month will not pay more than Rs.5000 for it.
  • A Multi-millionaire who earns Rs.5,00,000 per month will not pay more than Rs. 20,000 for it.

The point here is that eyeglasses is the need of all of them. But irrespective of what it can do, the value it delivers changes from person to person.

This was originally answered for a question on quora on start-ups, business valuation category. Here is the link

Do let me know your thoughts on this. Leave a comment or send a message.

Cheers,

Aditya

 

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