How To Value A Business

Deciding to sell your business or grow your business by acquiring another company?

As every business is unique, determining the value of a business is one of the most critical aspects of any transaction. The terms of the deal is another determining aspect... the more you know, the better prepared you are to consummate a deal! We are here to make that education transparent to both buyers and sellers.

Assets, liabilities, historical earnings, cash flow, projected earnings, future cash flow, current market conditions, industry popularity, and, most important, the objectives of the seller or buyer as well as the value of intangibles (patents, know-how, the quality of management, leases) are all taken into consideration to determine a company's fair market value.

The final selling price can be either higher or lower than the estimated range of values for the company, depending on the eagerness of the buyer to buy and the seller to sell, the demand for the type of company, the form of consideration paid, the negotiating skills of the parties, and most importantly, the terms of the deal.

Business valuations and appraisals are other services offered by International Business Brokers. The key to having a credible and viable valuation performed on the business is to have it performed by an independent third-party. Without this service the seller should be prepared for heavy negotiations due to the conflicting opinions of the seller's opinion of value versus the buyer's valuation. Also to be taken into consideration is the owner's terms that he is prepared to offer such as consulting agreements, holding a note, etc.

Buying a business is an intensive and emotional process even though it is considered "numbers." Also to be considered is the owner's personality if you are going to have him hold a note (or the buyer's personality if the seller is going to hold a note.

Let us help you.