BC Business Valuations
We
Determine Business Value. Create Business Value. Defend Business Value.
We provide professional business valuation and appraisal services in BC specializing in privately-held BC corporations, family-owned BC Businesses and other operating assets.
Business Valuations in BC
Getting Business Valuations Right and Why it Matters?
A business valuation is often needed to get third party or bank financing to buy or grow a business.
No one wants to leave money on the table. You have worked too hard to sell for less than its worth.
Who Can Benefit from a Business Valuation?
Businesses Don't Sell in a Bubble
Business Valuation is More than Numbers and Formulas.
Business sales don't happen in a bubble, so trying to determine the value of a business without considering broader factors like the state of the economy, the local market conditions, industry trends, lending rates and the other recent business sales in the same industry will likely lead to inaccurate business values.
While financials, formulas and metrics are important when determining enterprise value, they rarely tell the whole story. So it's important to take a wholistic approach to business valuations that goes beneath and beyond the numbers of a business.
This is where our experience and expertise shine. We take a multi-layered approach to business valuation. And in the end, after all of the information is collected and analyzed. we run the number through our 'common sense' calculator to confirm that our conclusions are in line with everything happening the in local market and on a national scale.
The Million Dollar Question (or Multi-Million),
What is My Business Worth?
Knowing what your business is worth is the key piece of information you need to complete
retirement planning, strategic planning and future divestitures or acquisitions.
We Can Answer the Question of What Your Business is Worth so you Can Plan for Your Future.
BC Business Valuation - It's More Than Just a Number
The first question we are asked when we meet with a business owner thinking of selling their business is, "What is My Business Worth?"
Business Sellers need to know what the value of their business is so they can make an informed decision if selling their business is right for them. Business Buyers need to know what a business is worth to ensure that they don't overpay for the business, and to make sure that they can secure some level of third party financing to buy the business.
How Much Is A Business Worth?
Business Valuations are based on a complex set of methodologies and industry standards as well as market indicators and the skill and experience of the business valuator.
The purpose of a business valuation is to determine what a Buyer would pay for your business in an open market. For most small business and the lower end of mid-market companies, a business valuation is based on arriving at the
Fair Market Value.
There are three generally accepted methods to valuing a small business:
The ASSET Method
The Assets of your business, minus any liabilities are considered the value of a business. There are numerous ways to determine the Asset value. This method is generally used for businesses that are not generating profits, or deemed to be a ''going concern" business. In most cases, the Asset Method does not accurately reflect the value of a business that is generating positive earnings.
The MARKET Method
Similar to the way real estate is valued, the Market Method compares your company to similar companies in your industry and geographical area. Business Brokers have access to databases to find details about what like businesses to yours have sold for. We compare gross sales and earnings of those businesses to your business. The Market Method is a useful and strong indicator of your businesses value.
The INCOME Method
The Value of your business is determined by the income stream that it will bring to a buyer. This method uses past and current earnings to predict future earnings. The assumption is that the buyer will maintain the current income levels as steady past earnings are a reasonable indicator of what the future earning probability of the business will me. Generally formulas are used that multiply earnings to get a value.
The methods above are provided in the simplest form possible. Within each method, there are many sub-categories and valuation techniques depending on the size of your business and your industry.
If your business is generating profits, there is a good chance that the primary method of valuing your business will be the Income Method, and the Market Method will be used to confirm the findings of the Income Method.
Nothing Kills a Deal Like A Bad Business Valuation.
This is true for both the Buyer and the Seller.
For the Seller:
If a Seller's business is incorrectly valued below the Fair Market Value of the business, it is unlikely that the Seller will list the business for sale as the value will likely not meet the Sellers needs in providing for retirement, buying another business, or investing. So the deal is dead before it starts.
For the Buyer:
If a Business is incorrectly valued above the Fair Market Value of the business, it is unlikely that the Buyer will be able to secure the third party financing needed to complete the business purchase. In addition, any Qualified Buyer completing proper due diligence and using the expertise of an experienced business broker and accountant will quickly determine that the business is overpriced and the buyer will walk away.
Business Valuation BC
Our BC Business Valuation Services begins by reviewing your financials, starting with your previous three year-ends, and your current year to date financial reports. But we go deeper and farther than just providing a financial analysis. We know how the real world works and how businesses are valued in actual market transactions.
We take the time to understand you and your business. What makes it unique. What are its value drivers. How is your business positioned in the marketplace and how do the current economic factors affect the value of your business if you were to sell it today.
We give you an accurate picture of what the current market value of your business is. We provide the Fair Market Value (FMV), the Most Probable Selling Price and a range of pricing options to fit your exit strategy, timing and other goals.
In the end, you have confidence and peace of mind knowing that you have the most accurate information and data at your disposal so you can make a sound decision.
