Business Valuations

Business Valuation Service

Our Business Valuation System uses the power of Big Data to deliver an extremely accurate business valuation through a simple 7-step process.

Do You Know the Value of Your Business?

Today, 98% of small business owners don’t know what their business is worth. Are you part of this statistic?

If so, consider this: You wouldn’t plan for retirement just a few months before you retire. So why would you wait until a major life event to plan for the future of your business?

Your Business Valuation Will Help You Plan

Your business valuation report will draw on industry statistics to help you gain a deeper understanding of how your business is performing. You’ll see the Key Performance Indicators that drive your valuation. Understanding these figures will help you uncover insights into how you can improve your business.

Overvaluing or undervaluing your business could set you up for an unpleasant surprise in the future. If your business is a large part of your net worth, then it’s important to know your business’s value so that you can plan effectively for your retirement income, succession, and estate.

Your businesses’s valuation will also help you to determine how best to protect your assets and decide whether you want to sell your business or pass it on to the next generation in your family.

Reasons to Get a Business Valuation (Today)

1. Selling Your Business

It’s important for you to accurately value your business so that you can receive a fair price when you’re ready to sell or consolidate.

2. Planning for Retirement

A business is typically a business owner’s largest asset. This is why it’s important for you to know what your business is worth in order to properly create a retirement plan and discuss retirement income strategies.

3. Proper Protection

Protecting your family starts with understanding how much your business is worth so that you know what your family stands to lose financially if something were to happen to you. A business valuation shows what level of protection is necessary.

4. Funding Your Business

A business valuation is necessary when securing funding for a business. Lending professionals may require a valuation during the lending process.

5. Estate or Trust Planning

Since a business is typically the largest asset owned by a business owner, it’s important to understand your business’s value before building an estate or trust plan. Your business’s value can have an outsize effect on tax planning and how an estate plan should be organized.

6. Succession Planning

When planning for a business owner’s exit, knowing the true value of the business can ensure that a proper succession plan is arranged. This is not just important for the owner and successor. It also protects employees the the future of the company.

7. Looking to Buy a Business

A business valuation can help a prospective buyer execute a transaction or consolidation strategy.

8. Grants or Gifting

A business valuation can assist with tax efficiency and gift planning.

Why Do Business Owners Neglect Conducting Regular Business Valuations?

In the Past, Business Valuations Were...

Expensive

Depending on the size of the business and its annual revenue, a typical business valuation would cost a business owner an average of $8,000.

Time-Consuming

Traditional business valuations take up to 4 weeks to complete.

Complicated

In a traditional business valuation, the business owner gathers tax forms, balance sheets and other financial documents, then reviews these with a business valuation expert. The interview and fact finding process is lengthy and takes the owner away from running their business.

Tempting to Avoid

Business owners usually avoided doing a business valuation until a life event necessitated it. Often these life events were unexpected and time sensitive – a lawsuit, divorce, urgent retirement, or downsizing. These are the most inconvenient times possible to complete the valuation process.

4 Valuation Methods Used

When calculating your business value, we’ll use each of these valuation methods to ensure a precise calculation.

1. Equity Value

Equity value includes inventory and supplies, fixed assets and intangible assets, plus liquid financial assets less all liabilities.

This value involves the full transfer of the legal entity including all account balances and current tax attributes. The buyer is acquiring ALL of the assets and liabilities, on and off the balance sheet.

2. Asset Sale Value

Asset sale value includes only  inventory and supplies, fixed assets, and all tangible assets. This measure excludes all liquid financial assets and all liabilities. The buyer operates from a newly formed legal entity. The seller keeps the cash and receivables but delivers the business free and clear of all debt.

3. Enterprise Value

Enterprise value is a reflection of the firm’s value as a functioning entity. This measure is helpful in that it facilitates comparisons to other companies with varying debt levels.

4. Liquidation Value

Liquidation value is based on the assumption of insolvency. This measure assumes that all assets on the balance sheet will immediately be sold and all debts will be repaid. This measure does not include accounts receivable.

13 Key Performance Indicators

Key Performance Indicators (KPIs) deliver insight into how a business is performing relative to industry competitors. Your business’s 29-page valuation report will break down 13 KPIs.

  1. Return on equity
  2. Receivables (conversion)
  3. Inventory turnover
  4. Fixed assets turnover
  5. Debt-to-equity
  6. Interest coverage
  7. Cash-to-debt
  8. Income-to-revenue
  9. Cash flow-to-revenue
  10. Receivables-to-income (pre tax)
  11. Inventory-to-income (pre tax)
  12. Fixed assets-to-income (pre tax)
  13. Total debt-to-income (pre tax)

Knowing Your Business’s Worth

It’s essential to start with a solid understanding of your net worth including your:

  1. Retirement and estate planning
  2. Protection planning
  3. Business coaching and planning opportunities
  4. Preparation for a business sale or purchase
  5. Continued service and added value for business owners

Business Valuation Resources

Your Business Valuation Will Help You Plan

To help you prepare for your business valuation, we’ve put together a Valuation Fact Finder. This 4-page worksheet will help you organize key information needed for your business valuation.

“BizQuiz” Business Owner Succession Planning Quiz

This quiz is designed to help you think about the most important decisions that could affect the future of your business.

Business Valuation System Preview

We’ve invested in technology to help business owners complete a fast and accurate business valuation. Get a peek at the technology and features of our system.

Start a Business Valuation Now

Enter your business information to begin the 7-step valuation process.