[ VALUATION ]
How will buyers value your business?
At Allan Taylor & Co. we believe the process of selling your business starts with one question: What is your business worth? This critical piece of information becomes the foundation for any further discussions about how to sell your business, when to sell your business, and what type of buyers might be interested in acquiring your business.
Simple. Practical. Affordable.
Our approach to business valuation revolves around a straightforward question: What would a buyer pay you for your business today? While there are many ways to value a business, we focus exclusively on current Market Value. After years of experience, we’ve come to realize that market value provides the best real-world estimate of how buyers value a business for sale.
Our business valuations are not certified, and are therefore less expensive than a formal business appraisal. Turnaround time is typically three to four weeks. Business owners and their advisors use our valuation report for a variety of reasons, including:
- Selling a business
- Personal financial planning
- Exit strategy planning
- Internal decision-making
- Growth planning
- Capital structure
- Buy-Sell agreements
- Unsolicited offers
We like to start our business valuation process with a conversation about your reasons for wanting a valuation, and how you plan to use our report. In addition to asking several questions about the history of your business and current operations, we also ask for a minimum of three years’ worth of financial statements (Profit & Loss Statements and Balance Sheets), as well as corporate tax returns.
There can be many reasons for getting a business valuation, but we can’t think of one reason not to understand the value of your largest asset.
[ FAQs ]
Find answers to some of the most common questions business owners ask.
[ FAQS ]
How will buyers value my business?
A common way to get an estimate of how a real-world buyer will value your business is to use a multiple of pre-tax earnings using comparable transaction data. We call this Market Value.
The multiple is determined by several factors, including the size of your business, your industry, operational performance at your business versus averages for your industry, future growth potential, and how much risk is associated with your business.
The earnings part of the equation is usually EBITDA, EBIT or adjusted NOI (Net Operating Income). In short, it’s the pre-tax earnings from the operations of your business. We analyze your financial statements and adjust them to show the true profitability from operations in the same way that a buyer would.
While valuation math seems fairly straightforward, it is far from simple.
What makes your valuation different?
What if the value seems too low to me?
For better or worse, the value of your business will be judged by its financial performance and future viability without you at the helm. There are a number of ways you can bolster the value of your business. We love working with clients for two to three years prior to selling a business so that we can put some measures in place that will get you maximum value and attract strong offers from buyers.
Do I need to have a business valuation done if I'm ready to sell now?
Is the Allan Taylor & Co. business valuation certified?
What if I need a certified business valuation?
How often should I have a business valuation done?
What is the cost of your business valuation?
The fee for our Business Value & Sellability Assessment starts at $3,500 (additional charges may apply). Turn-around time is approximately two to three weeks after we receive all of the information requested.