Business Valuation

The big question: What is the value of my business?

Your company represents a great source of pride and income to you and your family. You have invested years of your life creating, sculpting, and refining your business. As the owner, your decision to sell is a very important one, and will likely be based upon a number of key considerations, including the anticipated price, terms, and net proceeds of the sale. Our business brokers are in the business for sale market every day, dealing with Sellers, Buyers and Banks. We can help you make your decision by providing a fair market business valuation based upon proven principles, market comparables, verifiable business valuation models, and many years of experience selling thousands of businesses!

Value Assessment
To prepare our clients for the sale process, the business brokerage professionals at Sirius will provide a free fair market valuation analysis that establishes a reasonable range of value for your business. This “go to market” business valuation range considers a number of value drivers, including:

  • History / trend of Revenues
  • History / trend of Cash flows
  • Size of Cash flows
  • Working capital requirements
  • Marketability of the business for sale (is there a ready market, or limited buyer universe)
  • Degree of Competition
  • Ease of entry into the business for sale
  • Industry trends
  • Growth opportunities for the business for sale
  • Unique assets (differentiators like people, processes, licenses, exclusivity agreements)
  • Age and quality of physical plant and equipment assets
  • Location and Facilities (will a new owner need to inject additional capital to modernize)
  • Amount of risk (e.g., heavy seasonality, customer/supplier concentrations)
  • Motivation and Flexibility of the parties
  • Comparable Sales Data
  • ROI and income objectives of buyers

Broker’s Opinion of Value
If you are a business owner that needs a written report utilizing several relevant business valuation methods, or if you are a buyer that needs a value analysis on a business you are considering for purchase, then we can perform a Broker’s Opinion of Value report.  This report is typically 10 – 15 pages in length and explains the analysis that resulted in the conclusion of business value.

Certified Business Appraisal
Often a business owner requires a formal presentation of the value of a business in a self-contained written report. This type of business valuation is known as an Appraisal Report. If a business valuation has the potential to go to court, or if the report needs to be reviewed by others, such as the IRS for tax implications, this type of report explains in full detail how the business value was derived. The Appraisal is developed under the guidelines of the Uniform Standards of Professional Appraisal Practice (USPAP) and written by an appraiser certified to perform such analysis. USPAP represents the generally accepted and recognized standards of appraisal practice in the profession. Compliance with these standards ensures that proven peer-reviewed business valuation methods are used to develop defendable opinions of business value.

Situations that could necessitate an Appraisal Report are:

  • Buy-out of Partners/Shareholders (private firms)
  • Buy/Sell Agreements
  • Exit Planning
  • Fairness Opinions
  • Personal Financial Planning
  • Insurance Underwriting
  • Buy-in/Capital Infusions/Equity Participation Valuation
  • Independent Appraisal Verification
  • Divorce
  • Family Business Ownership Transfers
  • Mergers and Acquisitions

This report is typically 70 – 90+ pages in length.

Every business owner leaves their company eventually one way or another. Yet many companies (in fact most companies) don’t have an exit strategy. This is a mistake. To obtain maximum value for your company it’s important to utilize exit planning to develop a business exit strategy and to regularly review your progress in addition to understanding what is happening in your market and the current M&A market.

Contact us for your confidential review to assess your situation and understand all of the business valuation options that are available to you.