Buying Or Selling A Business
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“Valuation is the analytical process of determining the current (or projected) worth of an asset or a company. There are many techniques used for doing a valuation. An analyst placing a value on a company looks at the business's management, the composition of its capital structure, the prospect of future earnings, and the market value of its assets, among other metrics”, as defined by Investopedia.
As we mentioned above, determining the value of a company. That's because of the amount of data and information made available can help measure progress and success, and can help them track performance in the market compared to others. Moreover, savvy buyers and sellers use valuations to help determine the worth of potential investments.
We know how important it is to maximize the value of your business so, so the following procedures are taken to produce maximum value:
- Determining Fair Market Value which is the most commonly used (and most appropriate valuation) approach for a small to medium-sized business (defined as a business with annual sales of $15 million or less); and Income Based Valuation.
- Compile the Business Information to analyze the business such as financial statements for the last three to five years, and knowledge of the business operations sufficient to assess the risk factors in calculation.
- Gather information for potential buyers to accomplish a detailed due diligence process to get acquaint with the key aspects of the business they are considering purchasing.