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A business valuation is not just for a business owner preparing for a sale. There are numerous business and legal situations that require, or benefit greatly from, a detailed valuation. Among these situations are:
Several valuation methods and guidelines exist for each type of business, and their application must be tempered by professional judgement and experience.
Valuing a business is not an exact science. The valuation process involves comparing several different approaches and selecting the best method, based on the analyst’s knowledge and experience.
To be accurate, this comprehensive business valuation should take into account all aspects of the company’s business, including factors which may be difficult to value and that do not show up on financial statements. These factors include, among other things:
Valuation engagements range from an informal preliminary indication of value to a formal report including an opinion of value, depending on the purpose of the valuation and its intended use.
Often times a valuation can help business owners negotiate buy/sell agreements. A sound valuation can become part of the actual buy/sell agreement. A valuation that is prepared prior to the occurrence of a liquidation event can save both time and money. Business owners can also use a business valuation as one of the cornerstones of a long-term financial plan to enhance the value of their business. Business owners often use management consulting to improve strategies and tactics through a particular function (e.g., marketing, operations.) Business valuation consulting focuses on how strategies and tactics create value for business owners.
There are three major reasons why you would want to complete a business plan:
The business plan - what it includes:
The body of the business plan can be divided into four distinct sections:
Working closely and confidentially with the client, Business Reports & Values prepares a report that is concise, understandable and enables the reader to make informed decisions about the business.
The Principal of Business Reports & Values Lee G. Goldstein has been involved in the valuing and sale of businesses since 1986. He holds a double major degree in Accounting and Finance and is a member of The Australian Institute of Business Brokers. He has been the Triennial Certificate holder and Licensee of a business broking company since 1992.