| Strengths:
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proven methodology |
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national market |
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thousands of completed
valuations from all industries |
Customers:
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business owners |
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business brokers |
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financial consultants |
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lending
institutions |
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Have you ever sold or
bought a home? How did you settle on the price? You probably
started with a home appraisal and neighborhood analysis report.
The transfer of a business is similar to a home, but much more
complicated. Placing a fair market "value" on the
business requires an assessment of company assets, location,
economic, market, goodwill, and other factors.
True market value is obtained by using a fully qualified and experienced business valuation specialist to prepare a Market Valuation analysis . Without it, the buyer and seller will likely end up in long, tedious negotiations that can delay the closing of a sale and may leave a significant amount of value on the table.
The Novars Group Approach
It is called book vs.
market values: many business owners use tax
returns or financial statements prepared for tax returns as
a basis of determining value. Tax returns reflect an understatement
of "True Value" because they report depreciated
assets and IRS deductions.
In addition, the business goodwill or name, which represents
the market value of the company, is not a consideration for
tax purposes and is often not reflected. What you have is
a "book value" that
is lower than the true "market
value" of the business.
A market value presentation of a business often reflects
an increase in assets and equity:
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It is called determining
the right valuation method: the professional
valuation companies we work with are able to provide the following
style of valuation reports:
provides an approximate indication of value based upon the
performance of limited procedures agreed upon by the appraiser
and the client. The results can be expressed as a single
dollar amount or as a range. The valuer will only consider
limited relevant information and will perform only a limited
analysis. This type of report is generally used by smaller
companies.
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provides a fair market value opinion. It
is a more extensive analysis: Asset, income and Market Approaches
are considered. Market methods are based on generic group
multipliers. Discounted Future Cash Flows and Discounted
Future Earnings methods may be available; sometimes historical
methods only.
Public company comparisons are non-existent, or at best,
very limited. A limited review of business risk factors
is performed and the competitive environment is examined,
and there is an abbreviated company description. This is
the most common report to support a business sale and the
results are often used to support the pre-approval of a
business for Commercial financing, thus limiting your need
to hold a Seller's Note!
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provides an extensive analysis. All valuation methods are
applied as applicable. Comparable sales transactions and
multipliers for the Market methods are very specific to
the Company's business. Public company comparisons are available
and used when needed. A comprehensive review of the business
risk factors is undertaken, a detailed description of the
company and its positioning is provided, and a review and
assessment of the prevailing economic conditions in the
specific industry is undertaken.
There are many different firms offering business valuation
services — many CPA's also offer this as a service.
There are only a few, though, that offer you the quality of
service and the track record to make the investment worthwhile.
The Novars Group employs qualified and credentialed Business Valuation Experts who can determine a true business value and present it in a high quality professional report. A valuation from a Certified Valuator reflects the "Fair Market Value" of a business based on recast assets, cash flows, the company history and potential, the economy and industry sector and business values in today's market.
This represents the true economic value of your business. Give us a call for further consultation:
or e-mail your questions to:
info@novarsgroup.com
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