A business valuation is not the amount a business is guaranteed to sell for. Simply put; a valuation is the opinion from an expert, who understands the industry in which the assets are being valued and has acquired (through thorough investigation) all required data and facts about the business being valued. After this, the expert will then evaluate the data and perform a comparison between the internal and external forces that affect the enterprise. By analysing these forces (along with the market data, historical sales and other possible investments compared to the business); the valuer can then establish their belief on what the business is worth.
The emphasis here is on expert opinion and possible business value. The only way to determine the exact value of the business is to arrange an arms length transaction of that business.
The international value standards (IVS) refer to market value as follows: “Market value is the estimate and amount for which an asset is to exchange on the date of valuation between a willing buyer, and willing seller, in an arms length transaction wherein each of the parties has acted knowledgeably prudently and without compulsion.”
Bearing all of these facts in mind, it is crucial that when choosing someone to perform a business valuation; one must find the right expert who will be able to produce a logical and factual Valuation. That is backed by evidence, to help you through your decision process or resolution; quickly and efficiently.
We discuss the purpose of the valuation, the timeframe, and the standard of report required, whether that's for a sale, a dispute, tax purposes, or court proceedings.
Once engaged, we provide a clear list of the financial and operational information needed, so the process moves quickly and without back-and-forth.
We conduct a thorough review of the business, its financials, and its operations, supplemented by discussions with owners and key staff where relevant.
We evaluate the internal and external factors affecting the business, benchmarking against market data, comparable sales, and industry trends.
We evaluate the internal and external factors affecting the business, benchmarking against market data, comparable sales, and industry trends.
Drawing on the appropriate valuation methods, we form a well-supported opinion of value, backed by evidence rather than guesswork.
We produce a full, defensible report setting out our methodology, assumptions, and conclusions, ready for whatever purpose you need it for.