There are many ways to value a business, but our opinion of value focuses on one. It’s called market value, and it’s the way an outside buyer will determine what your business is worth. We combine common valuation methods with our own experience as business brokers to give you a clear understanding of what your business is worth. Some people consider valuation an important part of a “mock due diligence” exercise. We consider it essential for setting reasonable expectations and making sure that you and your business are ready for the rigors of the selling process.
Need a more formal report? Consider a business valuation by a third party appraisal firm. For a fee, a certified business appraisal will calculate the value of your company to the penny. You know what your house is worth, how much is in your checking and savings accounts and in your IRA, but do you know what your most valuable and complex asset is worth and how it is valued? It’s surprising how many business owners haven’t considered the importance of understanding the value of their business. This is critical for business planning purposes, but may also be important for estate and retirement planning as well. Among the methods used are:
- Excess Earnings
- Capitalization of Earnings
- Discretionary Earnings
- Discounted Future Cash Flows
In addition, general and industry specific market factors are considered and comparable sales are evaluated.