There are several factors that determine the value of any business. The value of a business is determined on several different factors that may increase or decrease a business's value over time. In a sense, determining the value of your business is similar to that of valuing business stock. However, because most small businesses and businesses are private, there is no stock table that you can use to determine the value of your business.

Through business valuation you are able to determine the fair market value of an owner's interest in a business. Through the process of business valuation you are able to resolve several different disputes that may be related to your business or personal life. For example, you may be able to resolve real estate, gift taxation and other related financial disputes. Additionally, you know the value of your business in the event that you want to sell it or if you are involved in other business legal disputes.

Through business valuation you are able to determine the "fair market value" of your business. This is the value of your business expressed in terms of cash. Should you decide to sell your business, this is the cash amount that you would ask for your business.

Additionally, there are several different elements of business valuation. There are typically three different approaches that are used in business valuation. These are income, asset and market approaches. Within these three different approaches, there are three different methods for determining the fair market value of a business.

The income approach of business valuation involves determining the net present value of the income currently generated by the business.

The asset approach involves adding the sum of the parts of the business to get a value and the market approach depends on determining the value of the business by comparing the business to another business that is similar in size and located in the same market.