Business Owners and Business Buyers: What’s The Right Value?
Most business owners have very little confidence in their own abilities to set market values for their most important assets, and it’s no wonder. According to the International Business Brokers Association, most business owners don’t even know where to turn to seek reliable advice in a buy or sell situation. Some turn to a lawyer, or accountant, others turn to stockbrokers or even friends, but the truth is, without formal training and industry standard modeling techniques, none of these professionals is qualified to set valuations on businesses of any kind. An affordable Business Valuation Expert is the key to protecting YOUR assets and interests at any bargaining table.
What is your business worth?
As your business grows, you may have to answer an important question: What is it really worth? Determining the value of a business is hardly pure science. To assess its value, an appraiser must consider many factors.
- The overall health of the business as demonstrated by its assets, liabilities, cash flow and earning capacity.
- Marketplace conditions, including competition and consumer demand.
- Future events, such as new products or potential lawsuits.
- Intangible factors, which may include customer mix and loyalty, brand awareness and employee morale.
In any business valuation, the most important factor is the premise of value – your reason for seeking the valuation. There are many reasons for having a business appraised, each of which might result in a different valuation:
- Sale of the business or a partial interest
- Purchase of a business
- Allocation of assets
- Buy-sell agreement between owners
- Estate planning
- Succession planning
In most cases the value of your business will vary depending on the reason the appraisal is being performed. For example, if you were selling a stake in your business, you might want to determine the fair market value of the business – what it would fetch on the open market. However, if you wanted to insure your business assets, you would seek to determine its insurable value.
Why business valuations are growing in popularity
People tend to think there is one Rule of Thumb to value their business. This is never true! For example, if you are a service business, someone may tell you the business is worth one years’ gross – but don’t for one moment think a business with three customers has the same value as one with 30, or even 300 customers. Is a radio station in a major market worth the same multiple of cash flow as one in a small town? Probably not. Are two dental practices in the same city, one with a famous, well-known leader worth the same multiple as a lesser known practice? Probably not.
Very few business owners know how much to expect from a business sale – how much to pay for an opportunity ahead – or, how to protect assets by knowing their value, even in these uncertain times.
Why do so many business buyers overpay? Because they don’t have an impartial professional telling them not to overpay! Why do so many business sellers have trouble selling their businesses? Because their advisors tell them to ask for too much! Why do some divorces ruin the business owning partner? And why so death taxes leave the heirs with so little of the estate? All for the same reason – unqualified individuals guessing at true values.
Here’s how to bolster your position at any bargaining table! And get what you deserve!
Remember, in most cases the value of your business will vary depending on the reason the appraisal is being performed. For example, if you were selling your business, you might want to determine the fair market value of the business – what it would fetch on the open market. However, if you wanted to take in a partner, you would seek to determine what an equal or less than equal share is worth, and it’s not pure division.
Business owners often procrastinate finding out the value of their business, mostly because they don’t know anyone with such knowledge, And when they find out, the average fee for an Business Valuation is several thousand, or tens of thousands of dollars and is a 3 to 6 month agonizing process – that cost and time frame closes the door for most people even considering a business valuation. But with ValuCorp, an owner or potential owner can get that information beginning at a very affordable price.
Your Family Business – Passing the Baton
Did you know that only one third of family-owned businesses are passed successfully to the second generation and only one out of six reach the third generation? If you’d like to pass your business on to a family member it makes sense to start planning now. By determining what your business is worth, you can maximize the wealth you transfer to the next generation and minimize your business transfer cost. A business valuation will start you on the road to:
- Identifying your financial goals.
- Analyzing the needs of family members.
- Identify potential ownership and management successors.(In some cases, it may be a good idea to hire non‑shareholder managers while the next generation develops its management skills.)
- Determining when succession should occur.
- Determining what income you will need during retirement, how long you may need it and where the money will come from.
- Deciding whether you want to
- Gift some or all of the business,
- Create an ESOP,
- Have an outright total or partial sale, or
- Consider other capital markets alternatives.
Often the best place to start is by working with a Business Valuation to determine the value of your business. Do you have concerns? Do you wish someone could highlight some of the issues?
When you assess the value of your business – often your capabilities and needs are identified and key opportunities for improvement surface.
While working on your Business Valuation, you may identify goals and critical success factors for your business, and measure how well your business is performing in key areas compared to other companies. This comparison, along with information gleaned from an analysis of your business can develop a framework to focus attention to help you attain your business goals.
- In what direction should you take the company?
- What investments in technology should you make?
- How can you attract, retain and motivate your key employees?
- How can your business become more efficient?
Best of all, when you highlight improvement opportunities, you can use the Business Valuation to help close the identified gaps in the areas of:
- Lending assistance
- Capital garnering
- Goal setting
One of the most popular and reasonably priced and readily understandable business valuations available
And it’s not just the money. It’s the months and months of waiting to find out. At ValuCorp, you’ll have your answer in just 2 weeks! In just 2 weeks, you’ll receive a comprehensive calculation of value prepared by an Accredited Senior Appraiser and trusted member of the American Society of Appraisers, the gold standard of valuation experts.
Your valuation will be prepared using the same sophisticated financial modeling techniques approved by the American Society of Appraisers, and all of the other appraisal organizations. These methods are widely recognized and respected by lawyers, accountants, investment bankers and business brokers throughout the country.
It’s a sad fact that many certified valuation experts charge tens of thousands of dollars for unnecessarily complicated and complex opinions. We know that. We also know that only a tiny percentage of cases even require such exhaustive and expensive reviews. We believe in sharing the best insider practices of the industry with the majority of hardworking American business owners . . . a professional, honest opinion for an appropriate, honest fee.
Fast and secure – names are never shared, or you can use an alias. Ask for your Confidential Portfolio Planner, an easy-to-assemble list of information we need from you. This information is 100% confidential, not to be shared with any person, business, or other entity. ValuCorp provides access to one of the nation’s leading business valuation experts in the country – one with over 30 years of industry experience, and who for the past several decades, prepared valuations for thousands and tens of thousands of dollars while working for major financial corporations. Now, that same expertise is available to you within just 2 weeks, at a very affordable price. The Business Valuation is also unique – because you can send in what-if changes twice at no extra charge, invaluable for management, budgeting and planning help that none of the other expertly prepared business valuations in the market offer.
ValuCorp knows your industry – Whatever industry you operate in, they have the information and expertise that allows you to see how well you compare to your best peers in the industry. Learn how well your business is performing and receive professional advice on areas that can be improved.
Remember – “If you don’t know what it is worth, the other side of the table has you at a disadvantage” – so look into the opportunity of getting an affordable business valuation working for you today.
If you’d like to know what your business is worth in the next 2 weeks – The Business Valuation offered by ValuCorp is one of the most reasonably priced, easily understood and rapidly delivered business valuations in the country today. It’s available directly to business owners and potential owners over the Internet. Now, the answers you need are just a mouse click away. Now you can know with certainty how to plan for your future. You can clickwww.valucorp.com to enroll, or call toll free 1-855-BIZ-VALU or 1-480-367-2622. (855-249-8258), or 480-367-2622 to enroll by phone.