Whether our clients are selling a business, buying a business, planning an estate, or obtaining debt or equity financing, we’re experts at the business valuation. Our distinctive ability to combine real-world deal experience, strategic perspective and analytics into business valuation projects enables our clients to draw informed conclusions—and make time-critical strategic decisions.
Many clients ask the same question, “What is my business worth?” This is a very loaded question being there are several perspectives to consider. Here is a few definitions that must be considered:
Asking Price: The price the business owner wants for their business for sale.
Selling Price: The price the the seller and buyer ultimately agree to the price of the business for sale.
Fair Market Value: Is the highest price the buyer is willing to pay and the lowest price the seller is willing to accept.
Market Value: The most probable price the business for sale should bring.
Investment Value: The value a company has to a particular investor, that considers the effect of synergy in its valuation.
The other big question asked is “How to value a business?” There are as many different approaches to business valuation as there are types of businesses. Some methods include:
Income & Revenue Approaches
- Discounted Future Earnings
- Capitalized Adjusted Earnings
- Seller’s Discretionary Earnings
- Gross Revenue Multiplier
- EBITDA Multiplier
- Prior Transactions
- Guideline M&A Method
Asset Based Approaches
- Adjusted Book Value
- Excess Earnings Method
- Rules of Thumb & Industry Formulas
We believe that many factors need to be considered when valuing businesses, which include: