Valuation Approach - Market Approach
As its name goes, the market approach to valuing a business calculates a business’ value based on the recent purchases and sales of comparable businesses within the same industry.
For example, an engineering services company in Singapore will look at recent sale or purchase price of other similar engineering services companies in Singapore as a benchmark to set its selling price.
This approach will specifically help you determine an appropriate selling or purchase price based on your local market. Any business can use this approach to business valuation, as long as they can gather sufficient, relevant data on which to compare their business. It can be an especially useful approach for rapidly growing businesses and industries.
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