Whether you are looking to purchase an existing business, considering new investors, ready to exit your business, attempting to resolve disputes associated with liability, shareholder equity, estate planning or marital dissolution, objective valuation can make the difference between loss or gain, success or failure. Getting your Orlando business valuation done right takes knowledge, experience, preparation and thought.
Business valuation depends on your assumptions and are based on judgment, experience and relevant information. There is no one way of valuing a business.
Our approach is to intimately know your business in order to understand what constitutes its value. We work closely with you to analyze your operations, historical financial data, culture of your business and other factors that may increase the value but are not apparent from your financial data.
There are three fundamental ways to do Orlando business valuation: asset approach, market approach and income approach.
An asset approach is the type of valuation that focuses on the fair market value of business net assets. Since every operating business has assets and liabilities, a natural way to determine the value is to subtract liabilities from the assets but the difficulty lies in the details – what assets and liabilities to exclude or add. For example, many business balance sheets may not include the most important assets such as internally developed products, brand name, customer relationships and assembled workforce.
The real value of such assets may be far greater than all the “recorded” assets combined.
A market approach relies on signs from the real market place to determine what a business is worth where the economic principle of competition is applied.
We rely on the market to determine the fair market value of the business -something that the buyers will be willing to pay and the sellers willing to accept.
The market approach to valuing a business is a great way to determine its fair market value and support your offer or asking price. Unfortunately, market data is not always available for every business or does not account for intricacies of a particular enterprise. For that reason we may have to use other valuation methods.
The income approach measures the value based on the core reason for running a business – making money. Income approach involves a mixture of historical data and future expectations. In addition to figuring out what kind of profits the business is likely to bring, the income valuation approach also factors in the risk.
Since the business value must be established in the present, the expected income and risk must be translated to today. The income approach utilizes two ways to measure that – capitalization and discounting.
Valuation of a business always constitutes a significant undertaking. Depending on your needs, we tailor our analysis to your specific requests.
We provide a full range of Orlando business valuation services for the following needs:
- Business Disputes
- Estate Planning
- Mergers & Acquisitions
- Other Business Valuation Scenarios