The Business Valuation Process: A Walkthrough
For the business owner with revenue or sales of $350k to $10 million.
How much is my business worth in a divorce? How can I prepare a business for sale when the owner is approaching retirement age? I just got an offer to sell my business, should I sell now?
Selling a business, a big moment has arrived for the business owner: what do I need to do to establish a value for the business? Business valuation can follow a large number of steps, depending on the complexity of the case and experience of the valuation professional.
At Summit Business Valuation Associates, LLC, five simple steps or tasks are followed:
1. Preplanning and Document Requests
Preplanning and document requests, including payroll records, historical income statements, sales forecasts, and schedule of assets and liabilities are collected.
2. Review and Adjust
Review and adjust historical income statements and forecast sales and expense projections (ideally for five years going forward).
3. Choose the Valuation Method
Consider and discuss possible business valuation methods. Summarize each option in the context of economic relevance to the business valuation case.
4. Apply the Process
Apply the selected valuation process to the financial calculations, considering the company-sponsored records and third party economic data.
5. Assemble Estimates
Assemble and summarize the various possible business value estimations, considering the ownership interest and purpose of the business sale (i.e. divorce action-retirement purpose) that is completed with business valuation conclusion.
Ideal client: business owners with annual company revenues of between $350k and $10 million count on our accurate business value conclusions, affordably produced - starting at just $3,500.
Seeking to understand the economic value of a business? Contact Cliff Benjamin today: