Business valuation is a process and a set of procedures used to estimate the economic value of an owner's interest in a business. Valuation is used by financial market participants to determine the price they are willing to pay for a business. In addition to estimating the selling price of a business, the same valuation tools are often used by business appraisers to resolve disputes related to estate and gift taxation, divorce litigation, allocate business purchase price among business assets, establish a formula for estimating the value of partners' ownership interest for buy-sell agreements, and many other business and legal purposes such as in shareholders deadlock, divorce litigation and estate contest.
Naturally, both buyer and seller will have different ideas about the worth of a business. The seller will tend to value the company at the highest price possible, while the buyer will try to negotiate the lowest price they can. Because of this conflict between seller and buyer, it is important to use an intermediary, a valuation consultant with an unbiased objective view of the transaction.
Selling a business comes with a list of questions and important decisions, like deciding on a price for the business. Do you know your company’s worth? There are many methods that are used to find the value of a company. The amount at which you value your business could vary, depending on the method you use.
Every seller should learn the basics of business valuation in order to sell their business at a fair price. Unfortunately, their time is spent operating the business and not in the appraisal profession. Collecting financial data is something that can be completed in a short period of time and this information will be the basis for the valuation of the business. Once you have your records in order consult your CPA and an appraiser to determine the scope of the appraisal needed.
Our Acquisition Consultants specialize in helping investors buy and sell small and mid-sized businesses. More than just a broker or a banker, we provide expert guidance to ensure that our clients are well educated and prepared for the complex transaction ahead. Working with your account or our Certified Valuation Analysis (CPA designation), we specialize in valuing both hard and soft assets of the transaction. Our certified team of appraisers and consultants provide a complete valuation analysis which includes consideration of going concern intangible value, equipment value, and real property value.
We primarily represent sellers with revenues between $500,000 and $30,000,000 in such industries as Distribution, Manufacturing, Transportation, Retail, Automotive, and other Business to Business and Business to Consumer service companies in the Midwest. Many of our clients are right-sizing, strategizing, preparing for sale or acquisition, or want to maximize the results of a work-out. With over 40 years both running and owning companies, our consultants understand the dynamics that are inherent in a well-oiled organization and what to do if the dynamics just aren’t dynamic.
Our team has worked with top professionals to provide leadership training and consulting services to CEOs and business owners looking to address strategic challenges, grow their revenues, and develop succession or exit plans.