Buying or selling a business is one of the most difficult and misunderstood transactions there are. Highly skilled and educated business appraisers spend many hours preparing reports that will stand up in court proceedings and cost from $5,000 to $10,000 or more. Each year thousands of buyers and sellers make business valuation decisions based on rumors or their “gut feel” and are frequently disappointed with their decisions.
Successful buyers and sellers have one thing in common; they were willing to get an education about valuation and become involved in the valuation process before making a decision about value or price. Please note that we do not refer to valuation as an event, but as a process to follow aided by our 35 years of experience in the business.
The valuation process allows you to position a business for sale in the future, improve a business, justify an asking price or an offer on a business, determine if a particular business or industry is right for you, or to work more effectively with your banker and other professional advisors. The goal of this interactive program is to provide you with a very affordable and practical process that helps you to communicate with a buyer, seller or lender based on facts, not feelings.
Congratulations for taking this important step in the business buying/selling process. Your odds for success are greatly improved by focusing on this decision.
We begin by gathering data and financial statements for the subject property. We request that you send us the statements two days prior to our online meeting which will allow us time to analyze the information. You are not required to identify the property or the location.
We are normally on the phone and computer with you for two hours to complete and discuss each line item and category and end up with a financial and nonfinancial picture that accurately shows the historical earning power and future of the business.
Since some businesses includes assets that can frequently have a very significant value, we identify and list the fair market value of each item.
The next phase of the process includes a detailed 14-step Value Factor Analysis that allows us to identify, discuss and rate the factors that influence the value of a business as it compares to industry norms, competitors and future values.
Our “Value Estimation” is based on current industry ratios, the most important financial items from the “Stabilized Income Statement” and ratings from the “Value Factor Analysis”. This is the starting point prior to accessing the value from the Seller’s perspective and from the Buyer's perspective.
The Seller's Value Test is usually the amount and terms that a seller is offering the business for. Other very valuable uses are for exit planning for an owner, price justification, financing or business improvement.
The Buyer’s Test Model applies all of the above data to justify their ability to earn a salary, make the mortgage payments, satisfy their banker and make improvements to the property.
Summary of Value Factors and Action Plans to put the system to work. We help you prioritize your most important issues, make a plan to correct items that need attention and follow up to accomplish your goals.