Business Valuations

In today's advantageous market, many business owners do not receive the best value when they sell a business - most often because they do not truly know their company's value. For that reason, the valuation process is a true asset to the business owner and a thorough, professionally prepared valuation will assist him or her in:

• Helping identify the key value drivers, major strengths, and more importantly, the major weaknesses of a company allowing the owner to solve both obvious and hidden problems prior to selling a business.

• Determining a reasonable selling price. Many owners rely on general rules of thumb, casual advice from friends or other similarly unreliable sources. Values determined by general multiples or rules of thumb may be too high or too low. If the owner's expectation of value is too high, it will prolong the selling process until a price concession is made. If the price is too low, money is left on the table. Unless the business owner goes through the valuation process, he or she just will not know if the business is priced at market value.

• Fully understanding the value of the business will assist during negotiations. In this market, one can expect buyers to be sophisticated and experienced. They will conduct a rigorous analysis of the company, even if the seller has not. They will look at those factors and value drivers that the owner and his advisors should consider in valuing the company, and they will use that information against the seller in negotiations.

Third Party Value Calculation

 This valuation report is prepared by an independent, third-party valuation company, GCF Valuations.  The objective of a Calculation of Value is to provide an approximate indication of value based upon the performance of limited procedures agreed upon by the appraiser and the client.  Although GCF Valuations attempts to follow Uniform Standards of Professional Appraisal Practice (USPAP), calculation reports are not officially considered an appraisal by the USPAP, however it does allow for “adequate” and ”reasonable” care to our clients.  Developed for our business intermediary clients, Calculation of Value reports are utilized to provide a “preliminary” value for the broker to list their client’s business for sale and to be utilized until a Complete Appraisal is required.

Limited Scope Valuation

The Limited Valuation is a restricted use valuation report prepared by Sunbelt of Miami Valley and is intended for businesses with sales of less than $1,000,000. This report uses as a foundation for analysis the three most common models for determining the “Most Probable Selling Price” – Market, Asset and Income Methods.  This report provides only a brief synopsis of how the valuation conclusion was determined. The basis of this valuation is a market comparison with like companies within an industry.

Cash Flow Valuation

 The Cash Flow Valuation is a valuation report prepared internally by Sunbelt of Miami Valley and is intended for “main street” businesses with sales of less than $500,000. We suggest using this opinion of value for businesses that are commonly listed and sold such as tanning salons, dry cleaners, restaurants, and auto repair etc. This report provides only a brief synopsis of how the valuation conclusion was determined. The basis of this valuation is the Seller’s Discretionary Cash Flow earned by the current owner and uses the Business Reference Guide for market comparisons with like companies within an industry.