The Disappointing Story.
A lady called 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 accepted and the subsequent report submitted to the Court for its deliberations.
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 legal expense. Needless to say, the outcome was less than satisfactory to the lady concerned.
The Lesson:
If a business valuer primarily relies on business financial information and undertakes the work from the comfort of an arm chair, 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 understanding the physical nature of the business, the extent of the information and documentation available must, by their very nature, be largely based on ‘price’ to win valuation work.
‘Price Quote’ business valuations have their limitations. Don’t assume they will be comprehensive in the work that is undertaken to report formally on the value of the business.
Comprehensive Business Valuation Reports
There are four major components that a business valuation report should address in our view. These are:
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- 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 marketplace; and
- Selection and application of a valuation approach and method to the results of those investigations.
Don’t be disappointed; get the outcome you deserve instead of the one given to you
Talk to an experienced Business Valuer first. Call one of our Registered Business Valuers today.
If you would like information on our business valuation fee structure, click here.
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
