Business Valuation
Choosing a business valuation that provides market evidence is critically important.
Business valuations that have no relationship to actual market evidence could cost you thousands of dollars.
The reality is determining the value of your business is not easy. You’ll find many willing to give you an opinion, but most will never deliver the written evidence to you.
We are experienced Business Valuers and Intermediaries who provide comprehensive valuation reports for:
- Family Law and Court
- Partnership Breakups
- Exit Planning
- Government
- For sale and purchases
- All other purposes
For information on present market conditions and how this will affect your business you need to call us on 1300 551 757.
Be aware, most business valuers:
- Have never sold a business
- Do not participate in the business sales marketplace
- Use financial statements only to calculate a businesses value, and
- Often do business valuations and assessments without ever seeing the physical business
Investigating the Physical Nature and Environment of a Business.
The physical nature and environment investigation of a business should look into these broad areas:
- Its industry, economy and location.
- Its premises, plant and equipment, products, customers, suppliers and competition at least.
- Its management structure, strategies, controls, systems and processes.
All enterprises confront risks to their future, causing that future to differ from the past. Businesses may appear to be similar, however, all businesses have diversity in strengths, weaknesses and they confront opportunities and threats differently.
Owners may (or may not) have in place strategies and activities that maximise future prospects, minimising weaknesses and threats. Future profits are impacted by owners’ decisions, as is business value.
Investigating the physical nature and environment of a business demands that the Business Valuer inspect the business operation. In our view, a business valuation report where the Business Valuer has not inspected the business is materially deficient.
Only in extenuating circumstances and with specific instructions from a client would a Business Valuer not physically inspect a business operation and premises. Fundamentally, we believe that it is very difficult to value a business when we haven’t physically seen it.
Call us now for your FREE consultation on the present market
and the realistic chances of your business selling.
Investigating Market Information.
Small to Medium Enterprise (SME) businesses are influenced by the personal preferences of owners. The selection of ownership entity, financial recording, reporting, and business practices mean that SME business information and data can vary widely in terms of verifiability, quality, and quantity. There are hundreds of business categories, with varying sizes, cultures, and record-keeping practices.
Experience in and data from SME businesses shows it is essential to bring the ‘real-world’ into assessing any business value. We regularly see ‘arm-chair’ or theoretical business valuation reports produced without any market evidence to support the conclusions of value.
We are Business Brokers as well as Business Valuers. It is important to know what business buyers will pay for a business opportunity and what business sellers will accept. For these reasons, we believe market evidence is essential to support all conclusions of business value made in Business Valuation Reports.
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Valuation Approaches and Methods
Broadly, there are only three approaches to business valuations. Each needs to be considered on its merits before selecting that approach and method appropriate for the client’s purposes or reasons. The selected approach and method will have a critical influence on the valuation outcome.
Knowledge, skill, and experience are key professional attributes needed to select the right approach and method to apply to the work.
We have seen many instances where unrecognized methods are used, often resulting in a fabricated, completely misleading results costing business owners tens of thousands of dollars.
This Decision is An Important Choice
Business Valuation Reports that are going to be relied upon for important legal and commercial decisions, particularly those decisions that will impact your financial position or incur financial liability need careful consideration.
Business valuation work is demanding and time-consuming if it is to be accurate, credible, and reliable. Parties should make themselves informed and choose carefully.
Don’t buy cheap or fast reports, contact the professionals who work in the market with business buyers and sellers every day.
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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
