The most important aspect of selling a business is the Business Valuation. As a seller you want to get the maximum value for your business and have confidence in the price your business is on the market for and the price that you accept. No one wants to leave money on the table. Likewise, an inflated value, while flattering, will only result in the business sitting on the market with few, if any inquiries, and a great deal of time wasted.
We offer a free Market Value Analysis to prospective business owners who are considering selling their business. We also offer a range of independent third party valuations for instances where a more comprehensive or independent valuation is required.
Market Value Analysis
Our Market Value Analysis (also called a Calculation of Value) uses comparable sales from nationwide databases to calculate the market value of your business. This is based on the sales and Discretionary Earnings of the business. To be clear, Discretionary Earnings are NOT the net profit shown on your tax returns. Discretionary Earnings are the total economic benefit of owning your business which includes all of your personal expenses and perks that are run through the business. See What are Discretionary Earnings for a more detailed explanation of how we calculate this.
Independent Third Party Valuations
When do you need a Third Party Valuation?
5 Reasons to get a Third Party Valuation for Your Business
- Selling Your Business:
The less comprehensive Market Value Analysis is sufficient for many transactions, however, when the business value exceeds $1,000,000 a Third Party Valuation is a good investment. We have found that Third Party Valuations give buyers confidence in the asking price for the business and of equal importance they are a valuable tool in defending the price-value of the company during negotiations.
- SBA Financing:
SBA loans require a Third Party Business Valuation or Appraisal as part of the underwriting and approval process. The Third Party Valuation is ordered by the bank through one of their approved valuation firms.
- Buyout of a Partner:
Agreeing on an accurate and fair market value for the company when buying out a partner is difficult even in a congenial buyout. An Independent Third Party Business Valuation eliminates the emotion and personal opinions from the negotiations with a fact based appraisal of the business value.
- Divorce or Litigation:
The business value is often a key element in divorce and litigation proceedings and a Third Party Valuation is often required
- Estate Planning:
Business valuations are often required for estate planning in order to establish an accurate value of the business and owner’s assets.