Why are net revenues important to your business? Net revenues can help your business in three areas:
1) Selling your business
2) Obtaining financing
3) Building reserves
When you want to sell your business, most buyers will want to acquire a business that has healthy net revenues. Many times a business is valued by multiplying net revenues times 3 times or even as high as 8 times to determine the value. Second, net revenues are important if you are seeking long-term financing with a bank. Last, net revenues can help you build reserves for your business so you can save and have an emergency fund.