Don’t let This Happen to You.
The Disappointing Story.
A lady calls our office seeking a business valuation for divorce purposes. She is not satisfied with the Court ruling on the separation based the business valuation report already provided.
Solicitors from both sides sort quotes and then one of three quotes provided was agreed upon and submitted to the Court.
It turned out the business valuation had not really fully investigated the business, rather it primarily relied upon financial information. Too late to change the business valuer and get an alternative report without a lot more expense in legal costs.
The Lesson:
If a business valuer primarily relies on business financial information and undertakes the work from the comfort of an armchair, it may well be to your disadvantage.
The Real World.
Far too often, those not familiar with the business sales market provide business valuations which do not even remotely reflect the real world.
Business valuations are time consuming and demanding if they are to fully investigate the business concerned. The extent of the information and documentation available is a ‘must know’ before a realistic quote for the work can be done. ‘Quotes’ without knowing the extent of the information and documentation available must, by their very nature, be largely based on ‘price’ to win work.
‘Price Quote’ business valuations have their limitations. Don’t assume they will be comprehensive in the work that is undertaken.
Comprehensive Business Valuation Reports
There are four major components that a business valuation report should address in our view. These are:
- An investigation into the physical nature and environment of the business;
- An Investigation into the financial records and a performance;
- An investigation into the business sales market place; and
- Selecting and applying a valuation approach and method to the results of those investigations.
Don’t be Disappointed.
Choose your Business Valuer carefully before you make a costly mistake.
If you need more information, talk to us.
Negotia Group
1300-551-757
info@negotia.com.au
Disclaimer: The views expressed in this article are those of the Writer. The information is not meant to be exhaustive. Readers are responsible for making their own inquiries and assessments as to the truth and accuracy of all the information given and should seek advice from professionals. No liability (in contract, tort or otherwise) will be accepted for any loss or damage incurred as a result of reliance upon any material contained in this publication or any information or advice provided in this publication or incorporated in it.
Kevin Lovewell
M: 0401 308 385
P: 1300 551 757
E: Click here to contact Kevin Lovewell
Member & Registered Business Valuer
Australian Institute of Business Brokers
Jessica Holbrook
P: 1300 551 757
E: Click here to contact Negotia Group
Business Analyst
