Business Valuation
Do you know what your business is worth?
We do.
Many business owners leave a substantial amount of money on the table when they sell. For that reason, the valuation process is a true asset to the business owner and a thorough, professionally prepared analysis is critical to a successful sale.
This is where ABI excels. We can:
- Identify key value drivers, major strengths, and, more importantly, major weaknesses of your company.
- Solve both obvious and hidden problems prior to the selling process.
- Determine the best selling price.
- Values determined by general multiples or rules of thumb may be too high or too low.
- We expect buyers to be sophisticated and experienced – they will conduct a rigorous analysis of your company even if you have not.
What is Your Company’s “Value”?
A typical business has two values: “academic” and “fair market”. The academic value is derived from a formula based on hard assets, cash flow, industry averages, and multiples. The fair market value takes those items into consideration but also considers what buyers are really willing to pay.
But only one value really matters: what someone is willing to pay for your business!
Specific Valuation Services
ABI offers two solutions to evaluate your business:
- Opinion of Most Probable Selling Price (MPSP) Report
- Certified Valuation (available in three categories):
- Value Analysis.
- Formal Valuation (Limited Scope).
- Mergers & Acquisitions Valuation (USPAP compliant).
Please contact us for a price quote or for detailed information on our valuation services.
Ultimately, your business is worth whatever a buyer will pay you. ABI’s valuations will give you clear insights into the potential value, but there is no guarantee until a potential buyer makes an offer.
Opinion of Most Probable Selling Price
ABI will perform this analysis and the report will be less than 20 pages in length. It will suggest a range of most probable selling prices, assuming the sale of 100% of your company. It will employ various methods within the Asset, Income and Market Approaches to valuation and provide a summary discussion. The MPSP report is not USPAP compliant. Upon completion, we will review it with you as a foundation for establishing a likely selling price for your company and to assist you in understanding the key value drivers.
Once we receive complete information, you can expect the final report in around 5-7 days. Contact us for a price quote or if you have any questions.
Certified Valuation
We offer different certified valuations depending on the size of your business and purpose. Two of the most common reports are the Value Analysis and Limited Formal Valuation. These are both limited scope reports meaning they are not USPAP compliant. If the report may be used in litigation, a USPAP compliant report will most likely be required. These reports take anywhere from 2 weeks to 2 months to complete. We offer this service through third party valuation firms serving lenders, business brokers/investment banks and law firms. The analysts they employ only perform valuations, and are among the most highly credentialed experts in their field. Contact us for a price quote or if you have any questions.
The Value Analysis is a limited scope business valuation designed specifically for the “main street” business with sales of $1,000,000 or less. The report is approximately 40 pages and provides only a summary of how the valuation conclusion was determined. The basis of this valuation is discretionary cash flow, since most main street businesses are bought and sold on a multiple of cash flow. The value considers primarily historical and current financial performance and very little time is spent with the Balance Sheet. The report contains the following:
- Historical Income Statement
- Adjusted Cash Flow Statement
- Comparable Sales (Market Approach)
- Summary of Common Size Financial Statistics
- Summary Review of Each Valuation Approach
- Valuation Conclusion and Justification
The Formal Valuation (Limited Scope) is a limited scope business valuation intended for the standard small business with sales between $1,000,000 and $5,000,000. The report is approximately 70 pages and provides a detailed review of all aspects that were considered in determining the final valuation conclusion. The bulk of the report is financial analysis and the valuation conclusion is based more on EBITDA rather than discretionary cash flow and spends more time on current and future financial performance of the company. In addition to the earnings of the company, the Balance Sheet is also a key component of the analysis. The report contains the following:
- Historical Income Statement
- Adjusted Cash Flow Statement
- Complete Financial Statement Analysis
- Common Size Analysis
- Ratio Analysis
- Industry Analysis
- Economic Outlook
- Comparable Sales
- Detailed Description of Each Valuation Approach Considered and Used
- Valuation Conclusion and Justification
The Merger & Acquisition Valuation is a comprehensive business valuation for transactional purposes and is developed in accordance with the Uniform Standards of Appraisal Practice (USPAP). This valuation is intended for the larger small business with annual revenues in excess of $5,000,000, businesses that are expected to sell for more than $1,000,000, strategic acquisitions of niche businesses, and generally any business with significant growth expected in the future. The basis of the valuation is future earnings with the historical performance playing only a limited role in the valuation conclusion. The selection of guideline companies comes from both the private and public markets, which tends to make the valuation conclusion more aggressive. This report is a completely customized report and the number of pages can range from 30 to 200 depending on the information that is used to support the conclusion.
|
HOME
LOGIN
