What is My Business Worth?
A Business Appraisal or Valuation Opinion
The first step a business owner needs to consider when planning the sale of his or her company is to determine the market value. A business valuation provides an excellent indicator of your company’s market value, and it offers guidance for pricing the business for a successful sale in a reasonable period of time. A proper valuation also reduces the likelihood of receiving offers significantly lower than the actual market value, thus shrinking the gap between the expected purchase price and actual offers.
A Business Valuation Opinion is prepared by an experienced M&A advisor or business broker; and a Business Appraisal is prepared by an independent professional appraiser. The Business Valuation Opinion provides the Seller with an informed understanding of the market value of his/her company – prepared by professionals actively engaged in the market; and the Business Appraisal provides some Buyers with a greater level of confidence regarding the price of the business, because it has been validated by an independent professional business appraiser.
Besides providing our in-house business valuation opinions, we also coordinate (with professional independent business appraisers) the preparation of three types of business appraisals for our clients: (1) the Full Business Appraisal, (2) the Limited Scope Business Appraisal, and (3) the Value Report Business Appraisal.
The Full Business Appraisal provides the business owner with a comprehensive overview of the company’s worth. It includes a 70 -100 page report, which includes graphic displays, a statistical summary, critical factors, a premium analysis, value formulas, a correlation of methods, comments on the fair market value, a discretionary net profit analysis, a historical and projected overview, a list of all researched comparable sales, a write up on the industry, a description of where the industry is headed, industry ratios, area maps, and more.
The Limited Scope Business Appraisal (approximately 50 pages) is also offered. While not designed for the sophisticated buyer, it does provide valuable information for companies that cannot afford the Full Business Valuation report.
The Value Report Business Appraisal (approximately 30 pages) is designed for smaller companies that cannot afford the more comprehensive business valuations. It is not designed for companies with over $5 million in revenues, and is not designed for companies who could end up in litigation, for estate planning, or need a stock sale appraisal.
Most of our clients choose our internally prepared business valuation opinion as the first step in the process of selling their business. Many of our clients also chose to have us coordinate the preparation of an independent appraisal to verify our market analysis – and to convince potential buyers that the asking price is not inflated above market.
Along with a preparation of an appraisal of our client’s company, after we have been engaged, we will also prepare comprehensive marketing documents. These documents are indispensable during the selling process, and they also serve as a template for the continuous improvement of the company’s value. These documents are updated every three to six months to provide Buyers with fresh financials and new employee & operational information. These updates also assist our clients in running their company with an eye on maximizing the value of their business. We provide our clients with all the services necessary to determine the market value of their company and to prepare and implement a successful marketing strategy to sell, or obtain growth financing, for their company.
Contact our Charlotte or Atlanta office if you’re considering the sale or valuation of your company.
The Summit Acquisitions Group — Business Brokers and M&A Advisors — specializes in the sale, appraisal, and financing of privately owned companies ranging in valuation from $750,000 to $25,000,000. Contact their offices in Atlanta, GA or Charlotte, NC for a free consultation.
