Bay Area Business Valuations
Understanding the market value of your business is important.
Whether you are considering retirement, planning to move on to another venture, or would just like to know how your business value stands up amongst competitors’, every business owner can benefit from a valuation.
What is a Valuation?
A valuation analyzes your company’s assets to determine its value. As such, valuations are the baseline for either selling your business at a fair price, or understanding what you need to do in the next several years to prepare your business for sale. Additionally, valuations are also vital if you are planning on transferring your business to a family member or are seeking ways to increase your business’s overall value.
All business valuations are done by a licensed, certified Business Intermediary using one or more of the following appraisal methods.
Multiple of Discretionary Earnings Method:
This business appraisal method is primarily based on the expenses the owner has discretionary control over. This includes: salary, benefits, one-time expenses, and other personal items. These expenses are added to the profits shown on your Tax Returns to reveal the combined financial benefit to the seller. The resulting discretionary earnings are then available to the prospective buyer to service acquisition debt and to pay himself/herself a salary.
Excess Earnings Method:
In this type of business asset appraisal, brokerage services assess a company’s tangible and intangible assets. The excess earnings method is implemented by placing a value on a business’s goodwill via merging its asset-based valuation and income approach valuation.
Selling Price Analysis:
This method of business valuation provides the seller with a real-time view of what buyers will face in an acquisition. It reveals whether or not a business will be financeable and provide a reasonable return on investment for the new owner if it is sold at a certain price. If the valuation reveals that it is not, then the likelihood of a successful transaction drastically diminishes.
The Best Brokers For You
Most business owners have trouble valuating their assets under objective marketplace parameters. Conversely, the trusted and experienced brokerage professionals at Sunbelt are trained to give you an accurate valuation of your business at every turn. Servicing areas such as Santa Clara, San Jose, Sunnyvale, and Mt. View, Sunbelt Business Brokers, Greater Bay Area provides you with a dependable Broker’s Opinion of Value.