Business Valuations

AZBB offers objective third party business valuations that are highly recommended for owners who are thinking of selling their business. Valuations, of course, can also be used for other purposes including insurance policies, minority shareholder values, divorce, partnership splits, acquiring expansion capital from lenders, IRS audit disputes, retirement planning, IPO offerings, annual business check-ups, ESOP programs, and many other reasons that owners encounter during their business careers.

why should an owner consider independent business valuation ?

There are numerous examples across the country of business owners selling their business, which is one of their major asset holdings, for a price below the true market value of the business. Saving on the cost of the valuation is not a good enough reason when such large dollar amounts are at stake. For this reason the valuation process is a true asset to the business owner, and a well thought out business valuation will assist them in:

five step valuation process :

1. Determining the purpose of the valuation, date of value, and ownership interest that is being appraised.

2. Gather and review all necessary business documents that often include, but are not limited to, corporate documents, financial records, market information, key personnel files, key customers, industry trends, and comparable sales of similar businesses.

3. Identify all value indicators of the business and owned non-operating assets using three categories for valuation approaches: Asset, Market, and Income.

4. Provide a final opinion of value after consideration of all information obtained, reviewed, and analyzed. Also, appropriate allocations for goodwill and other intangibles are adjusted for.

5. Prepare and deliver a final written report.

types of valuations offered :

(Please note that if the business owner decides to retain AZBB to sell their business then the below formal appraisal costs are refundable at escrow closing).

Snapshot Valuation - This is a restricted use valuation report that is intended for small main street businesses with sales of less than $350,000.00. It is suggested that this opinion of value be used for businesses such as tanning salons, dry cleaners, restaurants, and auto repair etc. The report is approximately 12 pages and 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. Cost - $500.00.

Value Analysis - This is a restricted use business valuation designed specifically for the "main street" company with sales of $1,000,000.00 or less. The report is intended for "asset sale, financial buyers" and is approximately 48 pages providing only a summary of how the valuation conclusion was determined. The basis of this valuation is discretionary cash flow since most main street businesses are bought and sold on a multiple of cash flow. The value considers primarily historical and current financial performance, and very little time is spent with the Balance Sheet. The report contains the following partial list ofexhibits:

limited formal valuation :

This is a restricted use business valuation intended for the standard small business with sales between $1,000.000.00 and $8,000,000.00. The report is intended for "asset sale, financial buyers" and is approximately 80 pages providing a detailed review of all aspects that were considered in determining the final valuation conclusion. The bulk of the report is financial analysis and the valuation conclusion is supported on much more detail. In addition to reviewing the company's historical and projected earnings, the report also contains a detailed review of the Balance Sheet. The report contains the following partial list of exhibits:

merger & acquisition valuation :

This is a comprehensive business valuation for strategic Mergers and Acquisitions and is developed in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP). This is a stock valuation and is intended for the middle market business with annual revenues in excess of $5,000,000.00 and or EBITDA of $1,000,000.00, strategic acquisitions of niche businesses, and generally any business with significant growth expected in the future. The basis of valuation is on future earnings and the selection and the selection of guideline companies comes from both the private and public markets. This is a completely customized report, and the number of pages can range between 30 to 200 depending on the information that is used to support the conclusion. Cost: $7,000.00.

Contact AZBB today to begin the process of determining the value of one of your most valuable assets.

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