Business Valuation

Let's start by taking YOUR pulse.

Valuing a small business is a complex process that involves evaluating a variety of factors. Our process involves some key steps that can ensure you are developing and protecting your business in a way that accelerates the value.

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The initial valuation is critical and should include the aspects that both you and a potential buyer feel accurately reflect the power of your business. Here are 7 steps to comprehensive valuation.

1.

Determine your goals: What do you want to achieve through the sale or transfer of your business? Do you want to retire, pursue a new venture, or simply move on to something different?

2.

Gather financial information: The next step is to gather financial information about the business, including its revenue, expenses, assets, and liabilities. This information can be obtained from the business’s financial statements, tax returns, and other financial records.

3.

Normalize financial statements: Once the financial information has been gathered, it may need to be adjusted or normalized to reflect the true economic performance of the business. This might involve adjusting for non-recurring expenses, changes in accounting methods, or other factors that could distort the financial statements.

4.

Choose a valuation method: There are several different methods that can be used to value a small business, including the asset approach, the market approach, and the income approach. The choice of method will depend on the purpose of the valuation, as well as the specific characteristics of the business being valued.

5.

Apply valuation method(s): Once the valuation method has been chosen, it can be applied to the financial information and other data collected about the business. This may involve using formulas or ratios to calculate a valuation multiple, or conducting a more detailed analysis of the business’s operations and market conditions.

6.

Consider other factors: In addition to the financial information and valuation method(s), there may be other factors that need to be taken into account when valuing a small business. These could include the strength of the management team, the competitive landscape, and the potential for future growth or expansion.

7.

Prepare a valuation report: Once the valuation analysis is complete, a written report should be prepared that summarizes the findings and conclusions. This report should include a description of the valuation method(s) used, the data and assumptions underlying the analysis, and any relevant caveats or limitations.

It's important to note that small business valuations can be complex and time-consuming, and it's often a good idea to work with a professional valuation expert to ensure that the analysis is conducted properly and accurately reflects the true value of the business.