Business Valuation, Buying & Selling a Company, Exit Planning

Know These Six Biggie Mistakes When Selling Your Business

I write a lot about the issues that can arise when selling a business.  You may get tired of reading about it … but the once in a lifetime sale of a privately held business is probably the most important transaction in a business owner’s life. So here is another post on the subject. Business owners often underestimate the effort needed for a good outcome in a transaction.  They also over estimate the value and salability of their companies. Consider these items: Overestimating the value of the company.  The listing price should be based on the fair market value of…

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Business Valuation

Even More Business Valuation FAQs

To continue the series of Business Valuation FAQs, here are even more questions and answers. We hope you enjoyed the picture of the iconic HP 12c business calculator!  Many people still use it, all these years later. Back to the FAQs. These are questions we periodically hear in our valuation practice. Can a business have more than one value? The short answer to this question is an unequivocal “Yes”. The longer answer is that the value of a company can be different depending on the purpose of the valuation and in cases of acquisitions, who the buyer is and their…

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Business Valuation

More Business Valuation FAQs

Earlier, I posted a list of business valuation Frequently Asked Questions.   That post was well received, so I’m posting another bunch of FAQs. There is some overlap between this group of questions and what I’ve posted in the past. But it doesn’t hurt to cover the same ground twice. How do business valuators determine value? A previous post entitled “How Do Buyers Value a Business (Danger: Wonkish)”  sort of addresses this question.  It was written from the perspective of a buyer in a Mergers & Acquisition situation.  But M&A is only one of the reasons why you may be valuing…

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Business Valuation

The Four Steps of Valuation

Alteris LLC offers a unique approach to business valuation – the Four Steps of Valuation. Each step is increasingly more detailed and comprehensive. You can pick the level of valuation that fits your needs. Step One – The Express Valuation The Express Valuation uses very basic industry formula, market and other sector metrics and is ideal for preliminary business planning and general information. If you have never valued your company or want a very general “ball park” estimate, the Express Valuation is for you.  The Express Valuation is only for use in conjunction with other consulting services and should not…

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Business Valuation

Business Valuation FAQs

What is a Business Valuation?  A Focus on Value.  A business valuation determines the estimated market value of a business entity or financial asset in total or in part. A valuation estimates the complex economic benefits from combining a group of physical assets with the intangible assets of the business, most likely as a going concern. The Fair Market Value estimates the price that hypothetical informed buyers and sellers would negotiate at arms length for an entire business or a partial interest. Business Valuation: Art or Science? A business valuation combines quantitative financial techniques with qualitative analysis of the business, the…

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Business Valuation

Why Do You Need a Business Valuation?

A business is usually the most important asset that a business owner has.  When you need to know the value of your business assets utilizing the services of a valuation expert is needed. Here are just some of the situations where a valuation are needed: • Estate planning • IRS Liability due to a taxable event such as estates (death of equity holder), gifting and so on • Retirement funding estimates • Buy-sell agreements and insurance • Marital, Partnership & Corporate Dissolutions • Annual valuation of stock options • Exit planning strategy • Value maximizing strategy – increase what a…

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Business Valuation

How is a Business Valuation Conducted?

The business valuation process can be broken down into four parts. 1) The engagement process 2) Research and data gathering 3) Analysis and development of the business value 4) Reporting engagement results There are several items that need to be considered at the start.   What legal interest is to be valued – (e.g., 100% of the company’s common stock  but partial interests can be valued too) Valuation date – the exact date the company’s value is to be calculated The valuation purpose (e.g., tax, business sale, litigation support, business planning and so on) Define the standard of value, which…

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