|
A comprehensive business valuation report can be
invaluable in selling your business, to insure the proper
selling price is placed on the business, and also in the
ongoing operation of your business. For businesses with
sales in excess of $350,000, it is strongly recommended that a
business valuation be prepared every three
years.
The purpose of a business valuation:
- Sell your business at the Fair Market
Value.
- Provide a lender with Fair Market Value
information for a business loan.
- Plan for a merger, acquisition or stock
offering.
- Develop an estate plan or tax plan to protect
your wealth.
- Transfer of the business into a trust or create a
succession plan.
- Determine the value of assets and liabilities for
a divorce settlement.
- Assist attorneys in
litigation.
- Settlement of an insurance
clam.
- Set up an Employee Stock Ownership
(ESOP)
- Change in ownership within the
business
Whatever its purpose, a valuation can play a key
role in helping you achieve your financial goals. If you are selling
your business, an independent third party assessment is
absolutely required for the buyer of your business to qualify
for a third party loan.
It will insure your business is listed at a fair price
to maximize value to the owner, while allowing the closing of
the business to occur rapidly.
It is critical to determine the
purpose of the valuation. This determination shapes the choice
of valuation method(s) to apply, because different approaches
and concepts may be more appropriate for different
purposes.
Most business owners use tax
returns or financial statements prepared for tax purposes as
the basis for the financial presentation of their business. As
a result, the market value of assets are not reflected because
of depreciation or acceptable deductions that are written off
for tax purposes.
While this may be good for tax
purposes, tax return financials do not reflect years of hard
work in accumulating business assets. The business goodwill or
intangible value, which represents a major component of what
the business is worth in many cases, is not a consideration
for income tax purposes and, therefore, not addressed in
financial statements for tax purposes.
For a business to grow and expand
in today's market, capital and financing are essential. The
financial presentation reflecting what the business is worth
can be a powerful tool in dealing with financial institutions,
suppliers, and customers.
A
Business valuation is essential when the owner is ready to
consider selling the business. BBNSM
affiliates
have consistently produced higher prices and smoother sales
when a RWS valuation report is presented as part of the
business-offering package.
JRI
Associates
works directly with an RWS certified valuation analyst.
Together, with direct input from the seller (or owner), we consider the age of
the business, client base, goodwill, competitive advantage,
market position, and other intangible factors. Using a
detailed and disciplined approach, and a proprietary
questionnaire developed over the last twenty years, the
company's critical information is professionally
packaged. The goal is to have a complete understanding
of the factors that will influence, and maximize the price of
your company.
Brokers and Intermediaries report their closed
deals to RWS resulting in an unsurpassed database of private
transactions. Since RWS performs thousands of valuations
each year, the business owner can be assured that the opinion
presented by RWS reflects the most current market trends for
similar businesses.
Unique to RWS reports is the "Owners Justification
of Purchase Price". This analysis looks at the price of
the company from a buyer's point of view. The report
justifies for the business buyer that the recommended price of
the business is fair and to the seller that the business is
priced to obtain the maximum
value.
| 
